dangote cement plc...dangote cement plc consolidated and separate financial statements 31 december...

DANGOTE CEMENT PLC

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS31 DECEMBER 2014

DANGOTE CEMENT PLC CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

31 DECEMBER 2014

CONTENTS PAGE

Report of the Independent Auditors 1

Statement of Directors’ responsibilities 2

Consolidated and separate statement of profit or loss and other comprehensive income 3

Consolidated and separate statement of financial position 4

Consolidated statement of changes in equity 5

Separate statement of changes in equity 6

Consolidated and separate statement of cash flows 7

Notes to the consolidated and separate financial statements 8

Consolidated four-year financial summary 56

Separate five-year financial summary 57

Consolidated and separate statement of value added 58

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31 DECEMBER 2014

Independent Auditors Report

2


31 DECEMBER 2014

The Directors of Dangote Cement Plc are responsible for the preparation of the consolidated and separate financial statements that give a true and fair view of the financial position of the Group and Company as at 31st December 2014. They are also responsible for the preparation of the results of its operations, cash flows and changes in equity for the year then ended, in compliance with International Financial Reporting Standards (IFRS) and in the manner required by the Companies and Allied Matters Act of Nigeria and the Financial Reporting Council of Nigeria Act, 2011.

In preparing the consolidated and separate financial statements, the Directors are responsible for:

• properly selecting and applying accounting policies;

• presenting information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

• providing additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group and Company's financial position and financial performance; and

• making an assessment of the Group and Company's ability to continue as a going concern.

The Directors are responsible for:

• designing, implementing and maintaining an effective and sound system of internal controls throughout the Group and Company;

• maintaining adequate accounting records that are sufficient to show and explain the Group and Company's transactions and disclose with reasonable accuracy at any time of the financial position of the Group and Company, and which enable them to ensure that the financial statements of the Group and Company comply with IFRS;

• maintaining statutory accounting records in compliance with the legislation of Nigeria and IFRS;

• taking such steps as are reasonably available to them to safeguard the assets of the Group and Company; and

• preventing and detecting fraud and other irregularities.

Going Concern:

The Directors have made an assessment of the Group and Company’s ability to continue as a going concern and have no reason to believe the Group and Company will not remain a going concern in the year ahead.

The consolidated and separate financial statements of the Group and Company for the year ended 31st December 2014 were approved by Directors on 19th March 2015.

On behalf of the Directors of the Group

________________________ _______________________ Alhaji Aliko Dangote, GCON Devakumar EdwinChairman, Board of Directors Group CEO FRC/2013/IODN/00000001766 FRC/2013/NSE/00000002070

Statement Of Directors’ Responsibilities for the Preparation and Approval Of The Financial Statements for the year ended 31st December 2014

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31 DECEMBER 2014

Group Company Note Year ended Year ended Year ended

14 '000 '000 '000 '000

Revenue 5 391,639,060 386,177,220 371,534,117 371,551,567 Cost of sales* 7 (143,057,897) (130,472,635) (128,583,576) (115,892,838)Gross profit 248,581,163 255,704,585 242,950,541 255,658,729 Administrative expenses 8 (27,659,437) (25,993,138) (20,939,192) (20,079,595)Selling and distribution expenses* 9 (37,428,398) (35,553,519) (34,645,344) (35,226,976)Other income 11 3,608,671 1,724,477 3,541,936 727,519Profit from operating activities 187,101,999 195,882,405 190,907,941 201,079,677

Finance income 10 30,565,122 8,596,499 42,498,705 10,380,078 Finance costs 10 (32,978,194) (13,717,542) (20,366,983) (11,448,932)

Profit before tax 184,688,927 190,761,362 213,039,663 200,010,823 Income tax (expense)/credit 14 (25,187,434) 10,436,726 (27,225,540) 10,251,931 Profit for the year 159,501,493 201,198,088 185,814,123 210,262,754

Other comprehensive income, net of income tax:

Items that may be reclassified subsequently to profit or loss:

Currency translation differences 1,152,198 (4,800,187) - -

Items that will not be reclassified to profit or loss:Remeasurement of defined benefit plan 27 449,717 280,490 449,717 280,490

Other comprehensive income for the year, net of income tax 1,601,915 (4,519,697) 449,717 280,490

Total comprehensive income for the year 161,103,408 196,678,391 186,263,840 210,543,244

Profit for the year attributable to:

Owners of the Company 160,578,394 201,912,292 185,814,123 210,262,754 Non-controlling Interests (1,076,901) (714,204) - -

159,501,493 201,198,088 185,814,123 210,262,754

Total comprehensive income for the year attributable to:

Owners of the Company 161,944,112 198,883,980 186,263,840 210,543,244 Non-controlling Interests (840,704) (2,205,589) - -

161,103,408 196,678,391 186,263,840 210,543,244

Earnings per share, basic and diluted (Naira) 13 9.42 11.85 10.90 12.34

The accompanying notes and non IFRS statements on pages 8 to 58 form an integral part of these consolidated and separate financial statements.

Year ended 31-Dec-14 31-Dec-13 31-Dec- 31-Dec-13

₦ ₦ ₦ ₦

* Prior year amounts have been regrouped to align with current year presentation. This does not have any impact on the results.

Consolidated and Separate Statement of Profit or Loss and Other Comprehensive Income for the year ended 31st December 2014

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31 DECEMBER 2014

Consolidated and Separate Statement of Financial Position As At 31st December 2014

Group Company 14 13 14 13 Note '000 '000 '000 '000Assets

Non-current assets Property, plant and equipment 15 747,793,820 581,465,116 526,721,478 452,046,889Intangible assets 16 3,698,535 2,306,170 682,327 672,190Investments 17.2 - 389 26,077,270 25,207,676Deferred tax asset 14 16,633,430 19,635,374 13,154,316 18,359,111Prepayments for property, plant & equipment 18 79,490,715 91,715,470 1,772,564 23,950,013Receivables from subsidiaries 29 - - 277,149,739 164,524,881 Total non-current assets 847,616,500 695,122,519 845,557,694 684,760,760

Current assetsInventories 19 42,687,840 27,667,288 36,314,579 23,576,746Trade and other receivables* 20 15,640,277 11,488,091 8,462,728 9,120,840Prepayments and other current assets 18 58,182,774 39,645,832 56,756,552 36,798,572Cash and bank balances 30 20,593,140 70,501,583 16,349,511 67,442,862Total current assets 137,104,031 149,302,794 117,883,370 136,939,020Total assets 984,720,531 844,425,313 963,441,064 821,699,780

LiabilitiesCurrent liabilitiesTrade and other payables* 23 100,929,998 83,437,532 80,407,479 74,511,377Current income tax payable 14 2,481,387 565,897 2,481,219 565,737Financial debt* 24 110,639,898 56,289,386 106,442,007 55,431,396Other current liabilities* 25.2 18,897,486 24,473,954 16,498,972 20,484,336 Total current liabilities* 232,948,769 164,766,769 205,829,677 150,992,846

Non-current liabilities Deferred tax liabilities 14 20,473,166 507,074 19,879,325 - Financial debt 24 131,941,708 124,850,394 95,435,088 95,079,111Provisions for liabilities and other charges 26 4,011,388 376,665 294,515 233,856Retirement benefits obligation 27 2,069,460 1,962,640 2,069,460 1,962,640Deferred revenue 25.1 1,389,885 1,868,501 1,389,885 1,868,501Total non current liabilities 159,885,607 129,565,274 119,068,273 99,144,108 Total liabilities 392,834,376 294,332,043 324,897,950 250,136,954Net assets 591,886,155 550,093,270 638,543,114 571,562,826

EquityShare capital 21 8,520,254 8,520,254 8,520,254 8,520,254Share premium 21 42,430,000 42,430,000 42,430,000 42,430,000Capital contribution 24a 2,876,642 2,876,642 2,828,497 2,828,497Currency translation reserve (3,836,663) (4,752,664) - -Employee benefit reserve (16,075) (465,792) (16,075) (465,792)Retained earnings 537,750,794 496,455,952 584,780,438 518,249,867Equity attributable to owners of the company 587,724,952 545,064,392 638,543,114 571,562,826Non-controlling interest 4,161,203 5,028,878 - - Total equity 591,886,155 550,093,270 638,543,114 571,562,826 Total equity and liabilities* 984,720,531 844,425,313 963,441,064 821,699,780

31-Dec- 31-Dec- 31-Dec- 31-Dec-₦ ₦ ₦ ₦



Alhaji Aliko Dangote, GCON Devakumar Edwin Hope UwagboeChairman, Board of Directors Group CEO Head of FinanceFRC/2013/IODN/00000001766 FRC/2013/NSE/00000002070 FRC/2014/ICAN/00000010364

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31 DECEMBER 2014

Employee Currency Share Share Retained benefit translation Capital to owners Controlling Total capital premium earnings reserve reserve contribution of the parent Interest

₦'000 ₦'000 ₦'000 ₦'000 ₦'000 ₦'000 ₦'000 ₦'000 ₦'000

Attributable Non-

equity

Consolidated Statement Of Changes In Equity for the year ended 31st December 2014

Balance as at

1st January 2013 8,520,254 42,430,000 345,665,182 (746,282) (1,443,862) 2,876,642 397,301,934 7,234,467 404,536,401

Profit for the year - - 201,912,292 - - - 201,912,292 (714,204) 201,198,088

Other comprehensive income for the year, net of income tax - - - 280,490 (3,308,802) - (3,028,312) (1,491,385) (4,519,697)

Total comprehensive Income for the year - - 201,912,292 280,490 (3,308,802) - 198,883,980 (2,205,589) 196,678,391 Dividends paid - - (51,121,522) - - - (51,121,522) - (51,121,522)

Balance as at 31st December 2013 8,520,254 42,430,000 496,455,952 (465,792) (4,752,664) 2,876,642 545,064,392 5,028,878 550,093,270

Profit for the year - - 160,578,394 - - - 160,578,394 (1,076,901) 159,501,493

Other comprehensive income

for the year, net of income tax - - - 449,717 916,001 - 1,365,718 236,197 1,601,915

Total comprehensive Income for the year - - 160,578,394 449,717 916,001 - 161,944,112 (840,704) 161,103,408

Effect of additional

participation in Group

companies - - - - - - (26,971) (26,971)

Dividends paid - -(119,283,552) - - -(119,283,552) -(119,283,552)

Balance as at

31st December 2014 8,520,254 42,430,000 537,750,794 (16,075) (3,836,663) 2,876,642 587,724,952 4,161,203 591,886,155


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31 DECEMBER 2014

Separate Statement Of Changes In Equityfor the year ended 31st December 2014

Share Share Capital Retained Employee Total

'000 '000 '000 000 '000 '000

Balance as at 1st January 2013 8,520,254 42,430,000 2,828,497 359,108,635 (746,282) 412,141,104

Profit for the year - - - 210,262,754 - 210,262,754

Other comprehensive income for the

year, net of income tax - - - - 280,490 280,490

Total comprehensive income for the year - - - 210,262,754 280,490 210,543,244

Dividends paid - - - (51,121,522) - (51,121,522)

Balance as at 31st December 2013 8,520,254 42,430,000 2,828,497 518,249,867 (465,792) 571,562,826

Profit for the year - - - 185,814,123 - 185,814,123

Other comprehensive income for the

year, net of income tax - - - - 449,717 449,717

Total comprehensive income for the year - - - 185,814,123 449,717 186,263,840

Dividends paid - - - (119,283,552) - (119,283,552)

Balance as at 31st December 2014 8,520,254 42,430,000 2,828,497 584,780,438 (16,075) 638,543,114

capital premium Contribution earnings Benefit equity

reserve

₦ ₦ ₦ ₦ ₦ ₦

The accompanying notes and non IFRS statements on pages 8 to 58 form an integral part of these consolidated and separate

financial statements.

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31 DECEMBER 2014

Consolidated and Separate Statement of Cash Flows

Note Group Company Year ended Year ended Year ended Year ended

13 '000 '000 '000 '000Cash flows from operating activitiesProfit before tax 184,688,927 190,761,362 213,039,663 200,010,823 Adjustments for:Depreciation & amortisation 15 & 16 36,265,847 33,705,506 34,202,056 32,165,155 Write off of property, plant and equipment 1,096,993 40,909 1,015,261 28,492 Interest expense 10 18,049,233 12,351,894 16,266,576 11,094,896Interest income 10 (3,147,210) (5,630,349) (15,139,796) (10,380,078)Unrealised exchange loss on borrowings 954,791 - 954,791 - Exchange gain on non-operating assets - - (24,267,851) -Amortisation of deferred revenue 25 (541,736) (602,255) (541,736) (602,101)Other provisions 3,634,723 (110,645) 60,659 (40,926)Provisions for employee benefits 27 872,873 795,262 872,873 795,262 Loss/(gain) on disposal of property, plant and equipment 58,692 (103,264) 58,692 (85,450)

241,933,133 231,208,420 226,521,188 232,986,073 Changes in working capital:Change in inventories (15,020,552) 4,810,651 (12,737,833) 7,276,792 Change in trade and other receivables* (4,152,186) 31,760,194 658,112 23,342,152 Change in trade and other payables* 16,931,126 18,742,927 5,334,762 19,768,148 Change in prepayments and other *current assets (18,536,942) (8,429,970) (19,957,980) (8,398,032)Change in other current liabilities* (5,264,022) 5,877,608 (3,667,538) 3,213,703Cash generated from operating activities 215,890,557 283,969,830 196,150,711 278,188,836

Gratuity paid and contribution to plan asset (316,336) (295,808) (316,336 (295,808)Income tax paid (225,936) (1,935,748) (225,936) (1,939,301)Net cash generated from operating activities 215,348,285 281,738,274 195,608,439 275,953,727

Cash flows from investing activitiesInterest received 3,147,210 5,630,349 3,072,605 5,450,373 Acquisition of intangible assets (1,596,321) (442,212) (243,893) (222,590)Acquisition of property, plant and equipment (217,192,188) (139,966,242) (121,796,962) (99,116,814)Proceeds from disposal of property, plant and equipment 1,486,613 11,248 1,486,613 11,248 Acquisition of investment - (389) (8,030) (389)Change in non-current prepayment 22,109,864 (40,799,285) 32,056,788 (2,887,804)Change in long term receivables from subsidiaries - - (76,691,920) (71,853,488)

Net cash used in investing activities (192,044,822) (175,566,531) (162,124,799) (168,619,464)

Cashflows from financing activitiesInterest paid (16,608,058) (12,019,482) (14,825,401) (11,762,862)Dividend paid (119,283,552) (51,121,522) (119,283,552) (51,121,522)Loans obtained 138,898,479 21,403,960 132,923,092 15,919,867 Loans repaid (83,391,130) (34,625,397) (83,391,130) (34,625,397)

Net cash used in financing activities (80,384,261) (76,362,441) (84,576,991) (81,589,914)

/ in cash and cash equivalent (57,080,798) 29,809,302 (51,093,351) 25,744,349 Effects of exchange rate changes on the balance of cash held in foreign currencies and other non monetary impact 3,838,371 (3,325,762) - - Cash and cash equivalents at beginning of year 69,645,893 43,162,353 67,442,862 41,698,513

Cash and cash equivalents at end of year 30.1 16,403,466 69,645,893 16,349,511 67,442,862

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-₦ ₦ ₦ ₦

(Decrease) Increase

* Prior year amounts have been regrouped to align with current year presentation. This does not have any impact on the results.The accompanying notes and non IFRS statements on pages 8 to 58 form an integral part of these consolidated and separate financial statements.

for the year ended 31st December 2014

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31 DECEMBER 2014

1. General InformationDangote Cement Plc (the Company) was incorporated in Nigeria as a public limited liability company on 4th November, 1992 and commenced operations in January 2007 under the name Obajana Cement Plc. The name was changed on 14th July 2010 to Dangote Cement Plc. Its parent company is Dangote Industries Limited (“DIL” or “the Parent Company”). Its ultimate controlling party is Alhaji Aliko Dangote.

The registered address of the Company is located at 1 Alfred Rewane Road, Ikoyi, Lagos, Nigeria.

The principal activity of the Company and its subsidiaries (together referred to as the Group) is to operate plants for the preparation, manufacture and distribution of cement and related products. The Company’s production activities are currently undertaken at Obajana town in Kogi State, Gboko in Benue State and Ibese in Ogun State; all in Nigeria. Information in respect of the subsidiaries' locations is disclosed in Note 17.

The consolidated financial statements of the Group for the year ended 31st December 2014 comprise the results and the financial position of the Company and its subsidiaries.

The separate financial statements of the Company for the year ended 31st December 2014 comprise those of the Company only.

These consolidated and separate financial statements for the year ended 31st December 2014 have been approved for issue by the Directors on 19th March 2015

2. Significant Accounting PoliciesThe principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1.1 Statement of ComplianceThe Company's full financial statements for the year ended 31st December 2014 have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB), and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB (together “IFRS”) that are effective at 31st December 2014 and requirements of the Companies and Allied Matters Act (CAMA) of Nigeria and the Financial Reporting Council (FRC) Act of Nigeria.

2.1.2 Basis of PreparationThe financial statements have been prepared on the historical cost basis except for financial instruments that are measured at revalued amounts or fair value, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

Fair ValueFair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability that market participants would take into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated and separate financial statements is determined on such a basis, except for leasing transactions that are within the scope of IAS 17, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in IAS 2 or value in use in IAS 36.

2.2.1 Basis of ConsolidationThe Group financial statements incorporate the financial statements of the Parent Company and entities controlled by the Company and its subsidiaries made up to 31st December 2014. Control is achieved where the investor;

(I) has power over the investee entity (ii) is exposed, or has rights, to variable returns from

the investee entity as a result of its involvement, (iii)can exercise some power over the investee to affect its returns.

The Company reassesses whether or not it still controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.

Income and expenses of subsidiaries acquired or disposed of during the year are included in the

for the year ended 31st December 2014Notes to the Consolidated and Separate Financial Statements

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31 DECEMBER 2014

consolidated statement of profit or loss and other comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate. Profit or loss and each component of other comprehensive income of subsidiaries are attributed to the owners’ of the Company and to the non-controlling interests even if this results in the non-controlling interest having a deficit balance.

In the Company’s separate financial statements, investments in subsidiaries are carried at cost less any impairment that has been recognised in profit or loss.

2.2.2 Transactions Eliminated on ConsolidationAll intra-group balances and any gain and losses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

2.3 Non-Controlling InterestNon-controlling interest is the equity in a subsidiary or entity controlled by the Company, not attributable, directly or indirectly, to the parent company and is presented separately in the consolidated statement of profit or loss and other comprehensive income and within equity in the consolidated statement of financial position. Total comprehensive income attributable to non-controlling interests is presented on the line “Non-controlling interests” in the statement of financial position, even if it can create negative non-controlling interests.

2.4 Acquisition of Entities Under Common ControlBusiness combinations arising from transfers of interests in entities that were under the control of the shareholder that controls the Group are accounted for prospectively as at the date that transfer of interest was effected. The assets and liabilities acquired are recognised at the carrying amounts recognised previously in the Group controlling shareholder’s consolidated financial statements. The difference between the consideration paid and the net assets acquired is accounted for directly in equity.

2.4.1 Changes in the Group’s Ownership Interests in Existing SubsidiariesChanges in the Group’s interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amount of

the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the difference between

(I) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests.

All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable IFRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.”

2.5 RevenueRevenue is measured at the fair value of the consideration received or receivable, net of returns, trade discounts, Value Added Tax and volume rebates.

2.5.1 Goods SoldRevenue from the sale of goods is recognised when the goods are delivered and titles have passed, at which time all the following conditions are satisfied:

• the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;

• the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits


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31 DECEMBER 2014

Amount relating to shipping and handling, whether included as part of sales or billed separately is recorded as revenue and cost incurred for shipping and handling are classified under selling and distribution expenses.

2.5.2 Finance IncomeFinance income comprises interest income on short-term deposits with banks, dividend income, changes in the fair value of financial assets at fair value through profit or loss and foreign exchange gains.

Dividend income from investments is recognised in the profit and loss account when the shareholder's right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably).

Interest income on short-term deposits is recognised by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

2.6 Borrowing CostsBorrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss in the period in which they are incurred.However, borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of that asset. The capitalisation of borrowing costs commences from the date of incurring of expenditure relating to the qualifying asset and ceases when all the activities necessary to prepare the qualifying asset for its intended use or sale are complete. The interest rate used to determine the amount of capitalized interest cost is the actual interest rate when there is a specific borrowing facility related to a construction project or the Group’s average borrowing interest rate. Borrowing costs relating to the period after acquisition, construction or production are expensed. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for

capitalisation. The borrowing costs capitalised may not exceed the actual interest incurred by the Group.

2.7 Foreign Currency2.7.1 Functional and Presentation CurrencyThese consolidated and separate financial statements are presented in the Nigerian Naira (N), which is the Company’s functional currency. All financial information presented in Naira has been rounded to the nearest thousand unless where otherwise stated.

2.7.2 Foreign Currency TransactionsIn preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:

. exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;

. exchange differences on transactions entered into in order to hedge certain foreign currency risks; and

. exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.

2.7.3 Foreign Operations


associated with the transaction will flow to the Group;and the cost incurred or to be incurred in respect of the transaction can be measured reliably.

•

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31 DECEMBER 2014

In the Group’s consolidated financial statements, all assets and liabilities of Group entities with a functional currency other than the Naira are translated into Naira upon consolidation. On consolidation, assets and liabilities have been translated at the closing rate at the reporting date. Income and expenses have been translated into the Naira at the average rate over the reporting period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used.

Exchange differences are charged/credited to other comprehensive income and recognized in a currency translation reserve in equity. The exchange differences arising on the translation are taken directly to a separate component of other comprehensive income “Foreign currency translation adjustments”. On the partial or total disposal of a foreign entity with a loss of control, the related share in the cumulative translation differences recognised in equity is recognised in the consolidated statement of profit or loss.

2.8 Property, Plant and EquipmentItems of property, plant and equipment are measured at cost or deemed cost less accumulated depreciation and accumulated impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the assets. Property, plant and machinery under construction are disclosed as capital work-in-progress. The cost of construction recognised includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, including borrowing costs on qualifying assets in accordance with the Group's accounting policy and the estimated costs of dismantling and removing the items and restoring the site on which they are located if the Group has a legal or constructive obligation to do so.

Such assets are classified to the appropriate categories of properties, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets commences when the assets are ready for their intended use. When parts of an item of property, plant and equipment have different useful lives and are individually significant in relation to total cost of an item, they are accounted for as separate items (major components) of property, plant and equipment.

The cost of replacing a component of an item of

property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefit embodied within the component will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced component is derecognised. The cost of day to day servicing of the property plant and equipment is recognised in profit or loss as incurred.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

2.8.1 DepreciationDepreciation is calculated on the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value (except for freehold land and assets under construction). Depreciation is recognized within “Cost of sales” and “Administrative and selling expenses,” depending on the utilization of the respective assets on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment.

Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term in which case the assets are depreciated over their useful life on the same basis as owned assets. Strategic spare parts with high value and held for commissioning of a new plant or for infrequent maintenance of plants are capitalised and depreciated over the shorter of their useful life and the remaining life of the plant from the date such strategic spare parts are capable of being used for their intended use.

Major overhaul expenditure, including replacement spares and labour costs, is capitalised and amortised over the average expected life between major overhauls. All other replacement spares and other costs relating to maintenance of plant are charged to profit or loss on consumption or as incurred respectively.

Life (years)Buildings 25Plant and machinery 10 - 25Power plants 5 – 25 Cement plants 5 – 25 Motor vehicles 4


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Computer hardware 3Furniture and equipment 5Aircraft and related components 5 - 25

The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

2.9 Intangible AssetsIn accordance with criteria set out in IAS 38 – Intangible Assets, intangible assets are recognised only if identifiable; controlled by the entity because of past events; it is probable that the expected future economic benefits that are attributable to the asset will flow to the Group and the cost of the asset can be measured reliably. Intangible assets primarily include amortizable items such as software, mineral rights, as well as certain development costs that meet the IAS 38 criteria.

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Intangible assets are amortized using the straight-line method over their useful lives ranging from two to seven years. Amortization expense is recorded in Cost of sales and Selling and distribution expenses or administrative expenses, based on the function of the underlying assets. The estimated useful lives and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis .

Exploration assets are carried at cost less any impairment losses. All costs, including overhead costs directly associated with the specific project are capitalised. The directors evaluate each project at each period end to determine if the carrying value should be written off. In determining whether expenditure meet the criteria to be capitalised, the directors use information from several sources, depending on the level of exploration.

Purchased exploration and evaluation assets are recognised at the cost of acquisition or at the fair value if purchased as part of a business combination. The costs will be amortised over the life of the project based on the expected flow of economic resources associated with the project.

2.9.1 Internally-generated Intangible Assets - Research And Development Expenditure

Expenditure on research activities is recognised as an expense in the period in which it is incurred. An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following have been demonstrated:

· the technical feasibility of completing the intangible asset so that it will be available for use or sale;

· the intention to complete the intangible asset and use or sell it;

· the ability to use or sell the intangible asset;

· how the intangible asset will generate probable future economic benefits;

· the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

· the ability to measure reliably the expenditure attributable to the intangible asset during its development.

The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

2.9.2 Derecognition of Intangible AssetsAn intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.

2.10 InventoriesInventories are stated at the lower of cost and net realisable value, with appropriate provisions for old


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and slow moving items. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

Cost is determined as follows:Raw MaterialsRaw Materials which include purchase cost and other costs incurred to bring the materials to their location and condition are valued using a weighted average cost basis.

Work In ProgressCost of work in progress includes cost of raw material, labour, production and attributable overheads based on normal operating capacity. Work in progress is valued using a weighted average cost basis.

Finished GoodsCost is determined using the weighted average method and includes cost of material, labour, production and attributable overheads based on normal operating capacity.

Spare Parts and ConsumablesSpare parts which are expected to be fully utilized in production within the next operating cycle and other consumables are valued at weighted average cost after making allowance for obsolete and damaged stocks.

2.11 Financial InstrumentsA financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial instruments are recognised in the consolidated and separate statements of financial position when a member of the Group or the Company becomes a party to the contractual obligations of the instrument. Regular way purchases or sales of financial assets, i.e. purchases or sales under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned, are accounted for at the trade date. Initially, financial instruments are recognized at their fair value. Transaction costs directly attributable to the acquisition or issue of financial instruments are recognized in determining the carrying amount except for financial instruments at fair value through profit or loss. For financial instruments classified as at Fair Value Through Profit or Loss (FVTPL) transaction costs incurred are

recognized in profit and loss. Subsequently, financial assets and liabilities are measured according to the category to which they are assigned. The Group does not make use of the option to designate financial assets or financial liabilities at fair value through profit or loss at inception (Fair Value Option). The Group does not have any financial assets classified as available for sale or held to maturity.

2.11.1 Financial AssetsFinancial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss' (FVTPL), (of which financial instruments are further classified as either held for trading(“HFT”) or designated at fair value through profit or loss' (FVTPL)), ‘held-to-maturity' investments, ‘available-for-sale' (AFS) financial assets and ‘loans and receivables' (which include amounts due from related parties, loans and receivables). The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

2.11.2 Cash and Cash EquivalentsThe Group considers all highly liquid unrestricted investments with less than three months maturity from the date of acquisition to be cash equivalents. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

2.11.3 Loans and ReceivablesLoans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction cost. Financial assets classified as loans and receivables are subsequently measured at amortized cost using the effective interest method less any impairment losses. Interest income is recognised by applying the effective interest rate, except for short-term receivables, where the effect of discounting is immaterial.

2.11.4 Derecognition of Financial AssetsThe Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and


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the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss.

2.11.5 Financial Liabilities and Equity Instruments Classification as Debt or EquityDebt and equity instruments issued by a member of the Group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

2.11.6 Equity InstrumentsAn equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs. Repurchase of the Company's own equity instruments is recognised and deducted directly in equity.

2.11.7 Financial liabilitiesFinancial liabilities are classified as either FVTPL or other financial liabilities' (which include loans from banks and related parties and trade and other payables).

The Group subsequently measures financial liabilities, except for derivative financial instruments, at amortised cost using the effective interest method.

2.11.8 Derivative Financial InstrumentsDerivative financial instruments, such as foreign currency exchange contracts and interest rate swap contracts, are initially measured at fair value, at the date the derivative contracts are entered into. Derivative financial instruments are classified as held for trading unless they are designated as hedging instruments, for which hedge accounting is applied. Changes in the fair value of derivative financial instruments are recognised at each reporting date either in profit and loss or, in the case of a cash flow hedge or net investment hedge, in other comprehensive income, net of tax. For hedging instruments, the timing of recognition in the profit or loss depends on the nature of the hedge relationship. Derivatives embedded in non-derivative host contracts are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts and the contracts are not measured at FVTPL.

2.11.9 De-recognition of Financial LiabilitiesThe Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

2.11.10 Offsetting Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

2.11.11 Effective Interest MethodThe effective interest method is a method of calculating the amortised cost of an interest bearing financial instrument and of allocating interest income and expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash flows (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

2.12 Impairment2.12.1 Financial AssetsA financial asset, other than at FVTPL, is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events that occurred after the initial recognition of the financial assets have had a negative effect on the estimated future cash flows of that asset.

For available-for-sale equity investments, a significant or prolonged decline in the fair value of an equity security below its cost is considered to be objective evidence of impairment.

For all other financial assets, objective evidence of impairment could include:

· significant financial difficulty of the issuer or counterparty; or

· breach of contract, such as a default or delinquency in interest or principal payments; or

· it is becoming probable that the borrower will enter bankruptcy or financial re-organisation; or


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· the disappearance of an active market for that

For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group's past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period by 90 days, as well as observable changes in national or local economic conditions that correlate with default on receivables.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between the carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss of an available for sale financial asset is calculated by reference to its current fair value. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

2.12.2 Non-financial AssetsThe carrying amounts of the Group’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. For intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable

amount is estimated at each reporting date.The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is recognised if the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses are reversed when there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. A reversal of an impairment loss is recognised immediately in profit or loss.

2.13 TaxationIncome tax expense represents the sum of the tax currently payable and deferred tax.

2.13.1 Current TaxThe tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in profit or loss because of items of income or expense that are taxable or deductible in future years and items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

2.13.2 Deferred TaxDeferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Deferred tax is not recognized for the following temporary differences: (i) the initial recognition of goodwill, (ii) the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and


financial asset because of financial difficulties.

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(iii) differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

2.13.3 Current And Deferred Tax For The YearCurrent and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

2.14 Government GrantsGovernment grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for

which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable. The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates. The amount recognised as government grant is recognised in profit or loss over the period the related expenditure is incurred.

2.15 Employee Benefits2.15.1 Short Term Employee BenefitsShort term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided by the employee.

2.15.2 Defined Contribution PlansA defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.

2.15.3 Defined Benefit PlansFor defined benefit retirement plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to


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profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:

• service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);

• net interest expense or income; and• remeasurement

The Group presents current service costs in profit or loss in the line item employee benefits expense. Interest is accounted for as finance costs in profit or loss.

2.16 ProvisionsProvisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Restoration CostsEnvironmental expenditure related to existing conditions resulting from past or current operations and from which no current or future benefit is discernible is charged to profit or loss. The Group recognizes its liability on a site-by-site basis when it can be reliably estimated. This liability includes the Group’s portion of the total costs and also a portion of other potentially responsible parties’ costs when it is probable that they will not be able to satisfy their respective shares of the clean-up obligation. Recoveries of reimbursements are recorded as assets when virtually certain.


2.17 ContingenciesContingent liabilities are not recognized in the consolidated statement of financial position but are disclosed unless the possibility of any outflow in settlement is remote. A contingent asset is not recognised in the consolidated statement of financial position but disclosed when an inflow of economic benefits is probable.

2.18 Earnings Per ShareThe Group presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of shares outstanding during the period. The weighted average number of ordinary shares outstanding during the period and for all periods presented is adjusted for the issue of bonus shares as if the bonus shares were outstanding at the beginning of the earliest period presented.

Diluted earnings per share are computed by dividing adjusted net income available to shareholders of the Company by the weighted average number of common shares outstanding during the year adjusted to include any dilutive potential common shares. Potential dilutive common shares result from stock options and convertible bonds issued by the Company on its own common shares.

2.19 LeasesIn accordance with IFRIC 4 – Determining Whether an Arrangement Contains a Lease, arrangements including transactions that convey a right to use the asset, or where fulfilment of the arrangement is dependent on the use of a specific asset, are analysed in order to assess whether such arrangements contain a lease and whether the prescriptions of IAS 17 Leases have to be applied.

Leases – as a lesseeIn accordance with IAS 17, the Group capitalizes assets financed through finance leases where the lease arrangement transfers to the Group substantially all of the rewards and risks of ownership. Lease arrangements are evaluated based upon the following criteria:

· the lease term in relation to the assets’ useful lives;

· the total future payments in relation to the fair value of the financed assets;

· existence of transfer of ownership;

· existence of a favourable purchase option; and

· specificity of the leased asset.

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Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. The corresponding lease obligations, excluding finance charges, are included in current or long-term financial liabilities as applicable

Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group’s general policy on borrowing costs (see note 2.6). Contingent rentals are recognised as expenses in the periods in which they are incurred.

All other leases are operating leases and they are not recognized on the Group’s statement of financial position. Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

3 Application of new and revised International Financial Reporting Standards (IFRSs)

3.1 New and revised IFRSs/IFRICs affecting amounts reported and/or disclosures in this financial statements

In the current year, the Group has applied a number of new and revised IFRSs issued by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1st January 2014.

Amendments to IFRS 10, IFRS 12 and IAS 27 Investment Entities The Group has applied the amendments to IFRS 10, IFRS 12 and IAS 27 Investment Entities for the first time in the current year. The amendments to IFRS 10 define an investment entity and require a reporting entity that meets the definition of an investment entity not to consolidate its subsidiaries but instead to measure its subsidiaries at fair value through profit or loss in its consolidated and separate financial statements. To qualify as an investment entity, a reporting entity is required to:• obtain funds from one or more investors for the

purpose of providing them with investment management services;

• commit to its investor(s) that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and

• measure and evaluate performance of substantially all of its investments on a fair value basis. Consequential amendments have been made to IFRS 12 and IAS 27 to introduce new disclosure requirements for investment entities.

As the Company is not an investment entity (assessed based on the criteria set out in IFRS 10 as at 1st January 2014), the application of the amendments has had no impact on the disclosures or the amounts recognised in the Group’s consolidated financial statements.

Amendments to IAS 32 Offsetting Financial Assets and Financial LiabilitiesThe Group has applied the amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities for the first time in the current year. The amendments to IAS 32 clarify the requirements relating to the offset of financial assets and financial liabilities. Specifically, the amendments clarify the meaning of currently has a legally enforceable right of set-off and simultaneous realisation and settlement.

The amendmen t s have been app l i ed retrospectively. As the Group does not have any financial assets and financial liabilities that qualify for offset, the application of the amendments has had no impact on the disclosures or on the amounts recognised in the Group’s consolidated financial statements. The Group has assessed whether certain of its financial assets and financial liabilities qualify for offset based on the criteria set out in the amendments and concluded that the application of


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The amendments have been app l i ed restrospectively. As the Group does not have any derivatives that are subject to novation, the application of these amendments has had no impact on the disclosures or on the amounts recognised in the Group’s consolidated financial statements.

IFRIC 21 Levies. The Group has applied IFRIC 21 Levies for the first time in the current year. IFRIC 21 addresses the issue as to when to recognise a liability to pay a levy imposed by a government. The Interpretation defines a levy, and specifies that the obligating event that gives rise to the liability is the activity that triggers the payment of the levy, as identified by legislation. The Interpretation provides guidance on how different levy arrangements should be accounted for, in particular, it clarifies that neither economic compulsion nor the going concern basis of financial statements preparation implies that an entity has a present obligation to pay a levy that will be triggered by operating in a future period.

IFRIC 21 has been applied retrospectively. The application of this Interpretation has had no material impact on the disclosures or on the amounts recognised in the Group’s consolidated financial statements."

3. Application of new and revised International Financial Reporting Standards (IFRSs)

3.2 New and revised IFRSs in issue but not yet effective

The Group has not applied the following new and revised IFRSs that have been issued but are not yet effective:


the amendments has had no impact on the amounts recognised in the Group’s consolidated financial statements.

Amendments to IAS 36 Recoverable Amount Disclosures for Non-Financial Assets.The Group has applied the amendments to IAS 36 Recoverable Amount Disclosures for Non-Financial Assets for the first time in the current year. The amendments to IAS 36 remove the requirement to disclose the recoverable amount of a cash-generating unit (CGU) to which goodwill or other intangible assets with indefinite useful lives had been allocated when there has been no impairment or reversal of impairment of the related CGU. Furthermore, the amendments introduce additional disclosure requirements applicable to when the recoverable amount of an asset or a CGU is measured at fair value less costs of disposal. These new disclosures include the fair value hierarchy, key assumptions and valuation techniques used which are in line with the disclosure required by IFRS 13 Fair Value Measurements.

The application of these amendments has had no material impact on the disclosures in the Group’s consolidated financial statements.

Amendments to IAS 39 Novation of Derivatives and Continuation of Hedge Accounting. The Group has applied the amendments to IAS 39 Novation of Derivatives and Continuation of Hedge Accounting for the first time in the current year. The amendments to IAS 39 provide relief from the requirement to discontinue hedge accounting when a derivative designated as a hedging instrument is novated under certain circumstances. The amendments also clarify that any change to the fair value of the derivative designated as a hedging instrument arising from the novation should be included in the assessment and measurement of hedge effectiveness

IFRS 9 Financial InstrumentsIFRS 15 Revenue from Contracts with Customers Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and AmortisationAmendments to IAS 16 and IAS 41 Agriculture: Bearer PlantsAmendments to IAS 19 Defined Benefit Plans: Employee Contributions Amendments to IFRSs Annual Improvements to IFRSs 2010-2012 CycleAmendments to IFRSs Annual Improvements to IFRSs 2011-2013 Cycle

1. Effective for annual periods beginning on or after 1st July 2014, with earlier application permitted.2. Effective for annual periods beginning on or after 1st July 2014, with limited exceptions. Earlier application is permitted.3. Effective for annual periods beginning on or after 1st January 2016, with earlier application permitted. 4. Effective for annual periods beginning on or after 1st January 2017, with earlier application permitted. 5. Effective for annual periods beginning on or after 1st January 2018, with earlier application permitted.

3

3

3

1

1

2

5

4

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IFRS 9 Financial InstrumentsIFRS 9 issued in November 2009 introduced new requirements for the classif ication and measurement of financial assets. IFRS 9 was subsequently amended in October 2010 to include requirements for the classif ication and measurement of financial liabilities and for derecognition, and in November 2013 to include the new requirements for general hedge accounting. Another revised version of IFRS 9 was issued in July 2014 mainly to include a) impairment requirements for financial assets and b) limited amendments to the c lass i f icat ion and measurement requirements by introducing a ‘fair value through other comprehensive income’ (FVTOCI) measurement category for certain simple debt instruments.

Key Requirements of IFRS 9:• All recognised financial assets that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement are required to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost at the end of subsequent accounting periods. Debt instruments that are held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets, and that have contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, are measured at FVTOCI. All other debt investments and equity investments are measured at their fair value at the end of subsequent accounting periods. In addition, under IFRS 9, entities may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income, with only dividend income generally recognised in profit or loss.

With regard to the measurement of financial liabilities designated as at fair value through profit or loss, IFRS 9 requires that the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is presented in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in

fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or loss. Under IAS 39, the entire amount of the change in the fair value of the financial liability designated as fair value through profit or loss is presented in profit or loss.

• In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model, as opposed to an incurred credit loss model under IAS 39. The expected credit loss model requires an entity to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. In other words, it is no longer necessary for a credit event to have occurred before credit losses are recognised.

The new general hedge accounting requirements retain the three types of hedge accounting mechanisms currently available in IAS 39. Under IFRS 9, greater flexibility has been introduced to the types of transactions eligible for hedge accounting, specifically broadening the types of instruments that qualify for hedging instruments and the types of risk components of non-financial items that are eligible for hedge accounting. In addition, the effectiveness test has been overhauled and replaced with the principle of an ‘economic relationship’. Retrospective assessment of hedge effectiveness is also no longer required. Enhanced disclosure requirements about an entity’s risk management activities have also been introduced.

The Directors of the Company anticipate that the application of IFRS 9 in the future may have a material impact on amounts reported in respect of the Group’s financial assets and financial liabilities. However, it is not practicable to provide a reasonable estimate of the effect of IFRS 9 until the Group undertakes a detailed review.

IFRS 15 Revenue from Contracts with CustomersIn May 2014, IFRS 15 was issued which establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. IFRS 15 will supersede the current revenue recognition guidance including IAS 18 Revenue, IAS 11 Construction Contracts and the related Interpretations when it becomes effective.

The core principle of IFRS 15 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the


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31 DECEMBER 2014

entity expects to be entitled in exchange for those goods or services. Specifically, the Standard introduces a 5-step approach to revenue recognition:

Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract.Step 3: Determine the transaction price.Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.

Under IFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the goods or services underlying the particular performance obligation is transferred to the customer. Far more prescriptive guidance has been added in IFRS 15 to deal with specific scenarios. Furthermore, extensive disclosures are required by IFRS 15.

The Directors of the Company do not anticipate that the application of IFRS 15 will have a material impact on the Group’s consolidated financial statements.

Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint OperationsThe amendments to IFRS 11 provide guidance on how to account for the acquisition of a joint operation that constitutes a business as defined in IFRS 3 Business Combinations. Specifically, the amendments state that the relevant principles on accounting for business combinations in IFRS 3 and other standards (e.g. IAS 36 Impairment of Assets regarding impairment testing of a cash-generating unit to which goodwill on acquisition of a joint operation has been allocated) should be applied. The same requirements should be applied to the formation of a joint operation if and only if an existing business is contributed to the joint operation by one of the parties that participate in the joint operation.

A joint operator is also required to disclose the relevant information required by IFRS 3 and other standards for business combinations.

The amendments to IFRS 11 apply prospectively for annual periods beginning on or after 1st January 2016. The directors of the Company do not anticipate that the application of these amendments to IFRS 11 will have a material impact on the Group’s consol idated f inanc ia l statements.

Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and AmortisationThe amendments to IAS 16 prohibit entities from using a revenue-based depreciation method for items of property, plant and equipment. The amendments to IAS 38 introduce a rebuttable presumption that revenue is not an appropriate basis for amortisation of an intangible asset. This presumption can only be rebutted in the following two limited circumstances:

a) when the intangible asset is expressed as a measure of revenue; orb) when it can be demonstrated that revenue and consumption of the economic benefits of the intangible asset are highly correlated.

The amendments apply prospectively for annual periods beginning on or after 1st January 2016. Currently, the Group uses the straight-line method for depreciation and amortisation for its property, plant and equipment, and intangible assets respectively. The Directors of the Company believe that the straight-line method is the most appropriate method to reflect the consumption of economic benefits inherent in the respective assets and accordingly, the Directors of the Company do not anticipate that the application of these amendments to IAS 16 and IAS 38 will have a material impact on the Group’s consolidated financial statements.

Amendments to IAS 16 and IAS 41 Agriculture: Bearer PlantsThe amendments to IAS 16 and IAS 41 define a bearer plant and require biological assets that meet the definition of a bearer plant to be accounted for as property, plant and equipment in accordance with IAS 16, instead of IAS 41. The produce growing on bearer plants continues to be accounted for in accordance with IAS 41.

The Directors of the Company do not anticipate that the application of these amendments to IAS 16 and IAS 41 will have a material impact on the Group’s consolidated financial statements as the Group is not engaged in agricultural activities.

Amendments to IAS 19 Defined Benefit Plans: Employee ContributionsThe amendments to IAS 19 clarify how an entity should account for contributions made by employees or third parties to defined benefit plans, based on whether those contributions are dependent on the number of years of service provided by the employee.


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31 DECEMBER 2014

For contributions that are independent of the number of years of service, the entity may either recognise the contributions as a reduction in the service cost in the period in which the related service is rendered, or to attribute them to the employees’ periods of service using the projected unit credit method; whereas for contributions that are dependent on the number of years of service, the entity is required to attribute them to the employees’ periods of service.

The Directors of the Company do not anticipate that the application of these amendments to IAS 19 will have a significant impact on the Group’s consolidated financial statements.

Annual Improvements to IFRSs 2010-2012 CycleThe Annual Improvements to IFRSs 2010-2012 Cycle include a number of amendments to various IFRSs, which are summarised below.The amendments to IFRS 2 (I) change the definitions of ‘vesting condition’ and ‘market condition’; and (ii) add definitions for ‘performance condition’ and ‘service condition’ which were previously included within the definition of ‘vesting condition’.

The amendments to IFRS 2 are effective for share-based payment transactions for which the grant date is on or after 1st July 2014.

The amendments to IFRS 3 clarify that contingent consideration that is classified as an asset or a liability should be measured at fair value at each reporting date, irrespective of whether the contingent consideration is a financial instrument within the scope of IFRS 9 or IAS 39 or a non-financial asset or liability. Changes in fair value (other than measurement period adjustments) should be recognised in profit or loss. The amendments to IFRS 3 are effective for business combinations for which the acquisition date is on or after 1st July 2014.

The amendments to IFRS 8 (I) require an entity to disclose the judgements made by management in applying the aggregation criteria to operating segments, including a description of the operating segments aggregated and the economic indicators assessed in determining whether the operating segments have ‘similar economic characteristics’; and (ii) clarify that a reconciliation of the total of the reportable segments’ assets to the entity’s assets should only be provided if the segment assets are

regularly provided to the chief operating decision-maker.

The amendments to the basis for conclusions of IFRS 13 clarify that the issue of IFRS 13 and consequential amendments to IAS 39 and IFRS 9 did not remove the ability to measure short-term receivables and payables with no stated interest rate at their invoice amounts without discounting, if the effect of discounting is immaterial. As the amendments do not contain any effective date, they are considered to be immediately effective.

The amendments to IAS 16 and IAS 38 remove perceived inconsistencies in the accounting for accumulated depreciation/amortisation when an item of property, plant and equipment or an intangible asset is revalued. The amended standards clarify that the gross carrying amount is adjusted in a manner consistent with the revaluation of the carrying amount of the asset and that accumulated depreciation/ amortisation is the difference between the gross carrying amount and the carrying amount after taking into account accumulated impairment losses.

The amendments to IAS 24 clarify that a management entity providing key management personnel services to a reporting entity is a related party of the reporting entity. Consequently, the reporting entity should disclose as related party transactions the amounts incurred for the service paid or payable to the management entity for the provision of key management personnel services. However, disclosure of the components of such compensation is not required.

The directors of the Company do not anticipate that the application of these amendments will have a significant impact on the Group’s consolidated financial statements.

Annual Improvements to IFRSs 2011-2013 CycleThe Annual Improvements to IFRSs 2011-2013 Cycle include a number of amendments to various IFRSs, which are summarised below. The amendments to IFRS 3 clarify that the standard does not apply to the accounting for the formation of all types of joint arrangement in the financial statements of the joint arrangement itself.The amendments to IFRS 13 clarify that the scope of the portfolio exception for measuring the fair value of a group of financial assets and financial liabilities on a net basis includes all contracts that are within the scope of, and accounted for in accordance with,


23


31 DECEMBER 2014

IAS 39 or IFRS 9, even if those contracts do not meet the definitions of financial assets or financial liabilities within IAS 32.

The amendments to IAS 40 clarify that IAS 40 and IFRS 3 are not mutually exclusive and application of both standards may be required. Consequently, an entity acquiring investment property must determine whether:

(a) the property meets the definition of investment property in terms of IAS 40; and

(b) the transaction meets the definition of a business combination under IFRS 3.

The directors of the Company do not anticipate that the application of these amendments will have a significant impact on the Group’s consolidated financial statements.

4 Critical Accounting Judgements And Key Sources Of Estimation UncertaintyThe preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The management of the Group revises its estimates and assumptions on a regular basis to ensure that they are relevant regarding the past experience and the current economic and political environment. Est imates and underly ing assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. The accounting for certain provisions, certain financial instruments and the disclosure of financial assets, contingent assets and liabilities at the date of the consolidated and separate financial statements is judgmental. The items, subject to judgment, are detailed in the corresponding notes to the consolidated and separate financial statements.

In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are discussed below:

4.1 Critical Accounting Judgements4.1.1 Control Over SubsidiariesThe management of the Company have assessed whether or not the Group has control over the subsidiaries based on whether the Group has the

practical ability to direct the relevant activities of each subsidiary laterally. In making their judgement, the directors considered the Group’s absolute size of holding in the subsidiaries and the relative size of and dispersion of the shareholdings owned by the other shareholders. After assessment, the Directors concluded that the Group has a sufficiently dominant voting interest to direct the relevant activities of the subsidiaries and therefore the Group has control over them.

4.2 Key Sources Of Estimation Uncertainty4.2.1 Provision For Restoration CostsManagement of the Group exercises significant judgement in estimating provisions for restoration costs. Should these estimates vary, profit or loss and statement of financial position in the following years would be impacted.

4.2.2 Provisions For Employee BenefitsThe actuarial techniques used to assess the value of the defined benefit plans involve financial assumptions (discount rate, rate of return on assets, medical costs trend rate) and demographic assumptions (salary increase rate, employee turnover rate, etc.). The Group uses the assistance of an external independent actuary in the assessment of these assumptions. For more details refer to note 27.2.

4.2.3 Estimated Useful Lives And Residual Values Of Property, Plant And EquipmentThe Group’s management determines the estimated useful lives and related depreciation charge for its items of property, plant and equipment on an annual basis. The Group has carried out a review of the residual values and useful lives of property, plant and equipment as at 31st December 2014 and that has not highlighted any requirement for an adjustment to the residual lives and remaining useful lives of the assets for the current or future periods. For more details refer to note 2.

4.2.4 Valuation Of Deferred TaxThe recognition of deferred tax assets requires an assessment of future taxable profit. Deferred tax assets are only recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. The availability of future taxable profits depends on several factors including the group’s future financial performance and if necessary, implementation of tax planning strategies.


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31 DECEMBER 2014

5.1 Information About Major CustomersIncluded in revenue arising from direct sales of cement of 391.3 billion (2013: 385.7 billion) is revenue of approximately 16.7 billion (2013: 14.3billion) which arose from sales to the Group's largest customer. No customer contributed 10% or more to the Group's revenue for both 2014 and 2013.

6 Segment Information

6.1 Products And Services From Which Reportable Segments Derive Their RevenueThe Executive Management Committee is the Company’s Chief Operating Decision Maker. Management has determined operating segments based on the information reported and reviewed by the Executive Management Committee for the purposes of allocating resources and assessing performance. The Executive Management Committee reviews internal management reports on at least a quarterly basis. These internal reports are prepared on the same basis as the accompanying consolidated and separate financial statements.

Segment information is presented in respect of the Group’s reportable segments. For management purposes, the Group is organised into business units by geographical areas in which the Group operates. The Group has 3 reportable segments based on location of the principal operations as follows:• Nigeria• West and Central Africa• East Africa

All segments are involved in the production, distribution, and sale of cement and ash. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

6.2 Segment Revenue and ResultsThe following is an analysis of the Group's revenue, results, assets and liabilities by reportable segment. Performance is measured based on segment sales revenue and operating profit, as included in the internal management reports that are reviewed by the Executive Management Committee. Segment revenue and operating profit are used to measure performance as management believes that such information is the most relevant in evaluating results of certain segments relative to other entities that operate within these industries

₦ ₦₦ ₦

South and

5. Sales (Tonnes) Group Company 2014 2013 2014 2013Sales volume: '000 tonnes '000 tonnes '000 tonnes '000 tonnesCement production capacity 34,050 20,250 29,250 19,250 Cement production volume 13,858 13,094 13,001 13,094 Trade cement purchase 344 695 - - (Increase)/decrease in stock of cement (231) 208 (128) 199 Total sales 13,971 13,997 12,873 13,293

Group Company 2014 2013 2014 2013 Revenue (Naira): ₦'000 ₦'000 ₦'000 ₦'000Revenue from sales of cement 391,270,022 385,653,425 371,534,117 371,551,567 Revenue from sales of other products 369,038 599,906 - -

391,639,060 386,253,331 371,534,117 371,551,567 Elimination/adjustment - (76,111) - -

391,639,060 386,177,220 371,534,117 371,551,567

Sales after adjusting intra-group sales as shown above are from external customers.


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31 DECEMBER 2014

2014Segment results Nigeria West & Central South & East Eliminations Total Africa Africa ₦ '000 ₦ '000 ₦ '000 ₦ '000 ₦'000Revenue 371,534,117 6,195,401 13,909,542 - 391,639,060Depreciation & amortisation 34,202,056 833,955 1,229,836 - 36,265,847 Operating profit/(loss) 190,907,941 (3,861,782) 55,840 - 187,101,999Other income 3,541,936 49,009 17,726 - 3,608,671 Finance income 42,498,705 1,437 132,169 (12,067,189) 30,565,122 Finance costs 20,366,983 10,194,194 3,634,623 (1,217,606) 32,978,194 Profit/(loss) after tax 185,814,123 (14,054,704) (1,408,340) (10,849,586) 159,501,493

Segment assets & liabilities

Non-current assets 845,557,694 97,519,215 220,460,411 (315,920,820) 847,616,500 Current assets 117,883,370 6,437,952 12,944,407 (161,698) 137,104,031 Total assets 963,441,064 103,957,167 233,404,818 (316,082,518) 984,720,531

Segment liabilities 324,897,950 128,391,136 216,723,313 (277,178,023) 392,834,376Net additions to non-current assets excluding deferred tax 166,001,729 35,552,859 78,143,746 (124,202,409) 155,495,925

2013Segment results Nigeria West & Central South & East Eliminations Total Africa Africa ₦ '000 ₦ '000 ₦'000 ₦ '000 ₦ '000Revenue 371,551,567 14,101,858 599,906 (76,111) 386,177,220 Depreciation & amortisation 32,165,155 1,366,869 173,482 - 33,705,506 Operating profit/(loss) 201,079,677 (4,169,725) (1,027,547) - 195,882,405Other income 727,519 962,319 34,639 - 1,724,477 Finance income 10,380,078 2,967,227 51,287 (4,802,093) 8,596,499 Finance costs 11,448,932 4,698,324 3,129 (2,432,843) 13,717,542 Profit/(loss) after tax 210,262,754 (5,901,191) (794,221) (2,369,254) 201,198,088

Segment assets & liabilities

Non-current assets 684,760,760 61,966,356 140,113,814 (191,718,411) 695,122,519 Current assets 136,939,020 8,469,848 3,932,068 (38,142) 149,302,794 Total assets 821,699,780 70,436,204 144,045,882 (191,756,553) 844,425,313

Segment liabilities 250,136,954 80,293,881 128,006,835 (164,105,627) 294,332,043

Net additions to non-current assets excluding deferred tax 166,703,518 15,273,055 59,560,458 (80,720,048) 160,816,983


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31 DECEMBER 2014

Significant non current assets by country excluding deferred tax Group Group 2014 2013 ₦'000 ₦'000Nigeria 832,403,378 666,401,649South Africa 56,102,542 48,855,677Senegal 50,491,884 43,633,830Zambia 51,575,695 29,662,290Ethiopia 61,994,355 39,211,548Tanzania 47,308,705 21,108,036Congo 16,821,920 1,664,414Cameroon 17,400,057 9,937,465

The accounting policies of the reportable segments are the same as the Group's accounting policies described in Note 2.

This is the measure reported to the Chief Operating Decision Maker for the purposes of resource allocation and assessment of segment performance. Group financing (including finance income and finance costs) and income taxes are managed at an individual company level.

6.5 Eliminations and AdjustmentsElimination and Adjustments relate to the following:

• Profit/(loss) after tax of 10.85 billion (2013: 2.37billion) is due to elimination of interest on inter-company loan.

• Non-current assets of 315.92 billion (2013: 191.72 billion) due to the elimination of investment in subsidiaries with the parent’s share of their equity and non current inter-company payable and receivable balances.

• Current assets of 161.7 million (2013: 38.14 million) are due to the elimination of current inter-company payable and receivable balances.

• Total liabilities of 277.18 billion (2013: 164.11 billion) due to the elimination of inter-company due to and due from related parties balances.

• Finance income and finance costs of 1.22 billion (2013: 2.43 billion) are due to the elimination of interest on inter-company loan.

In addition to the depreciation and amortisation reported above, a sum of 1.10 billion (2013: 40.9 million) in the financial statements was written off (impaired) in respect of property, plant and equipment. The impairment loss was attributable to the Nigerian operations.

₦ ₦

₦ ₦

₦ ₦

₦ ₦

₦12.07 billion (2013: ₦4.80 billion) ₦ ₦

₦ ₦


Significant revenue by country (External customers)

Nigeria 371,534,117 371,475,456Ghana 6,195,401 14,101,858South Africa 13,909,542 599,906

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31 DECEMBER 2014

7. Cost of sales Group Company

Year ended Year ended Year ended Year ended31-Dec-14 13 14 13

'000 '000 '000 '000Material consumed* 33,226,289 31,104,715 20,730,754 17,518,702 Fuel & power consumed* 62,023,119 48,599,511 60,810,555 48,463,019 Royalty (refer to (a)below) 461,447 447,833 456,519 447,833 Salaries and related staff costs 10,756,389 7,777,310 9,876,355 7,705,879 Depreciation & amortization 21,646,569 20,130,299 20,633,056 19,910,480Plant maintenance 11,797,844 9,053,818 11,739,497 8,994,745Other production expenses* 7,476,259 8,842,950 5,760,313 8,599,135 (Increase)/ decrease in finished goods and work in progress* (4,330,019) 4,516,199 (1,423,473) 4,253,045Total 143,057,897 130,472,635 128,583,576 115,892,838

(a) Royalty payable is charged based on volume of extraction made during the year.

8. Administrative Expenses

Salaries and related staff costs 9,470,701 7,483,005 7,729,186 6,291,126Corporate social responsibility 2,128,873 1,880,506 2,082,691 1,833,258Management fee (refer (a) below) 1,047,894 877,414 1,047,894 877,414Depreciation and amortisation 3,191,565 2,880,585 2,247,811 1,560,053Audit fees 239,007 191,981 176,000 160,000Directors' remuneration 254,065 144,989 254,065 144,989Rent, rate and insurance 1,788,758 1,456,107 1,138,220 1,059,279Repairs and maintenance 930,937 665,223 696,685 597,010Travel expenses 1,013,201 1,036,924 807,830 918,947Bank charges 565,057 501,273 485,357 453,522General administrative expenses 3,900,415 3,314,091 2,407,942 2,774,512Others (refer to (b) below) 2,031,971 5,532,548 850,250 3,380,993Impairment of property, plant and equipment 1,096,993 28,492 1,015,261 28,492 Total 27,659,437 25,993,138 20,939,192 20,079,595

(a) The management fee is charged by Dangote Industries Limited for management and corporate services provided to Gboko plant. It is based on sales from the plant net of discounts, rebates and applicable concessions provided to customers.

31-Dec- 31-Dec- 31-Dec-₦ ₦ ₦ ₦


Group CompanyYear ended Year ended Year ended Year ended31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13

₦ '000 ₦ '000 ₦ '000 ₦ '000

(b) Included in "Others" in the prior year (Group) is an amount of ₦2.1 billion incurred in 2013 in respect of litigation and settlement of land dispute in Senegal. In 2012, the title of the land on which the facilities of Dangote Cement Senegal S.A are located was in dispute which was settled out of court in 2013 thereby necessitating the payment of ₦2.1 billion to the plaintiff.


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31 DECEMBER 2014

Other employee related disclosures

Aggregate payroll costs:

Wages, salaries and staff welfare 18,988,639 14,224,207 16,640,925 12,965,294Pension costs 721,554 512,191 447,719 507,794Gratuity provision 516,897 523,917 516,897 523,917Total 20,227,090 15,260,315 17,605,541 13,997,005

Chairman and Director's remuneration

Directors’ remuneration comprises:Fees 33,000 7,600 33,000 7,600 Emoluments 221,065 137,389 221,065 137,389

254,065 144,989 254,065 144,989 Chairman 5,000 5,000 5,000 5,000 Highest paid Director 98,623 44,719 98,623 44,719

Number of Directors whose emoluments were within the following ranges: ₦ ₦ 1 – 3,200,000 - - - -3,200,001 – 8,750,000 10 6 10 6 8,750,001 – 20,000,000 - - - - Above 20,000,000 1 2 1 2 Total 11 8 11 8

Permanent employees remunerated at higher rate excluding allowances: ₦ ₦ 0 - 250,000 4,497 3,490 4,344 3,490 250,001 - 500,000 983 1,937 884 1,868 500,001 - 750,000 1,005 586 936 478 750,001 - 1,000,000 529 227 517 1381,000,001 - 1,250,000 619 96 610 691,250,001 - 1,500,000 272 64 269 411,500,001 - 2,000,000 430 57 345 452,000,001 and above 650 78 391 73

8,985 6,535 8,296 6,202

The average number of permanent employees employed during the year excluding Directors was as follows:Management 295 230 222 197 Non-management 7,917 5,963 7,578 5,644 Total 8,212 6,193 7,800 5,841


₦ '000 ₦ '000 ₦ '000 ₦ '000


₦ '000 ₦ '000 ₦ '000 ₦ '000


29


31 DECEMBER 2014


9. Selling and distribution expenses Group Company

Year ended Year ended Year ended Year ended 31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦ '000 ₦ '000 ₦ '000 ₦ '000


Group CompanyYear ended Year ended Year ended Year ended

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦ '000 ₦ '000 ₦ '000 ₦ '000

(Note 10.1)

10.1 Foreign exchange gain or loss arose as a result of the translation of foreign currencies denominated balances at the year end across the group. The increase in the current year was due to the depreciation of the respective currencies against the major foreign currencies at the year end.


31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦ '000 ₦ '000 ₦ '000 ₦ '000

(Note 25.1)


31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦ '000 ₦ '000 ₦ '000 ₦ '000

Loss/(p

Depreciation 11,427,713 10,694,622 11,321,189 10,694,622Advertisement and promotion 2,911,675 4,176,297 2,747,239 3,933,764Haulage expenses* 23,089,010 20,682,600 20,576,916 20,598,590Total 37,428,398 35,553,519 34,645,344 35,226,976

10. Finance income and finance costs

Finance income:Interest income 3,147,210 5,630,349 15,139,796 10,380,078Foreign exchange gain (Note 10.1) 27,417,912 2,966,150 27,358,909 - Total 30,565,122 8,596,499 42,498,705 10,380,078

Finance costs:Interest expenses 22,116,941 15,090,313 17,981,785 13,833,315 Less: amounts included in the cost of qualifying assets (4,067,708) (2,738,419) (1,715,209) (2,738,419)

18,049,233 12,351,894 16,266,576 11,094,896 Foreign exchange loss 14,545,013 1,061,331 3,716,459 49,719 Defined benefit obligation 355,885 271,345 355,885 271,345 Unwinding of discount 28,063 32,972 28,063 32,972 Total 32,978,194 13,717,542 20,366,983 11,448,932

The Average effective interest rate on funds borrowed generally is 10% per annum for the Group and Company (2013: 10% and 12% per annum). This is the average rate for capitalisation.

11. Other income

Insurance claims 106,029 1,110,027 106,029 168,783Scrap sales - 72,864 - 72,864Government grant 541,736 602,255 541,736 602,101Sundry (expense)/income 2,960,906 (60,669) 2,894,171 (116,229)Total 3,608,671 1,724,477 3,541,936 727,519

12 Profit for the yearProfit for the year includes the following charges/(credits):

Depreciation of property, plant and equipment 35,984,636 33,556,171 33,968,300 32,028,158 Amortisation of intangible assets 281,211 149,335 233,756 136,997 Auditors' remuneration 239,007 191,981 176,000 160,000 Employee benefits expense 20,227,090 15,260,315 17,605,541 13,997,005

rofit) on disposal of property, plant and equipment 58,692 (103,264) 58,692 (85,450)

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31 DECEMBER 2014

13 Earnings per shareThe earnings and weighted average number of ordinary shares used in the calculation of basic and diluted earnings per share are as follows:

Profit for the year attributable to owners of the Company 160,578,394 201,912,292 185,814,123 210,262,754Weighted average number of ordinary shares for the purposes of basic and diluted earnings per share 17,040,507 17,040,507 17,040,507 17,040,507Basic & diluted earnings per share 9.42 11.85 10.90 12.34

14. Income taxes14.1 Income tax recognised in profit or loss

Current taxCurrent tax expense in respect of the current year (2,139,936) (1,379) (2,141,420) (114)

Deferred taxDeferred tax (expense)/credit recognised in the current year (23,047,498) 10,438,105 (25,084,120) 10,252,045

Total income tax recognised in the current year (25,187,434) 10,436,726 (27,225,540) 10,251,931

Deferred tax assets have been recognised by the Group, since it is probable that future taxable profits will be available for offset.The income tax (expense)/credit for the year can be reconciled to the accounting profit as follows:

Profit before income tax 184,688,927 190,761,362 213,039,663 200,010,823 Income tax expense calculated at 32% (2013: 32%) (59,100,457) (61,043,636) (68,172,692) (64,003,463)Effect of income that is exempt from taxation 38,440,609 65,152,245 38,440,609Effect of expenses that are not deductible in determining taxable profit (5,692,392) (3,599) (1,960,642) (114)Effect of unused tax losses and offsets not recognised as deferred tax assets (5,510,668) (3,359,275) - - Effect of different tax rates of subsidiaries operating in other jurisdictions (11,212) - - -Other (733,986) (280,926) 284,233 (850,916)

(32,608,106) 464,810 (31,408,492) 297,752

Additional Capital Allowance granted on pioneer status during the year 7,420,672 9,971,916 4,182,952 9,954,179 Income tax income recognised in profit or loss (25,187,434) 10,436,726 (27,225,540) 10,251,931

The income tax rate of 32% (including education tax of 2%), was used for the company tax computation as established by the tax legislation of Nigeria effective in 2014 and 2013. The Group is also subject to taxation in South Africa, which has a statutory rate of 28% in effect at the end of 31st December, 2014 and 2013. The effect of different tax rates of subsidiaries operating in other jurisdictions was not material and included in the “Other” line of reconciliation above for 2013 but has been shown separately for 2014.


31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦ '000 ₦ '000 ₦ '000 ₦ '000


31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦ '000 ₦ '000 ₦ '000 ₦ '000


31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦ '000 ₦ '000 ₦ '000 ₦ '000

65,152,245


31


31 DECEMBER 2014

14.2 Current tax liabilities:

Income tax payable 2,481,387 565,897 2,481,219 565,737

14.3 Deferred tax balance

Deferred tax assets 16,633,430 19,635,374 13,154,316 18,359,111 Deferred tax liabilities (20,473,166) (507,074) (19,879,325) -

(3,839,736) 19,128,300 (6,725,009) 18,359,111

Group2014

Deferred tax assets /(liabilities) in relation to:Property, plant & equipment 16,988,466 (17,467,355) - (478,889)Unrealised exchange (gain)/loss - (7,127,736) - (7,127,736)Provision for doubtful debts 699,753 (310,038) - 389,715 Other provisions 766,069 (178,991) - 587,078 Other 674,012 2,036,622 79,462 2,790,096 Total 19,128,300 (23,047,498) 79,462 (3,839,736)

Deferred tax assets /(liabilities) in relation to:Property, plant & equipment 7,339,232 9,649,234 - 16,988,466 Provision for doubtful debts 647,763 51,990 - 699,753 Other provisions 120,070 645,999 - 766,069 Other 834,241 90,882 (251,111) 674,012 Total 8,941,306 10,438,105 (251,111) 19,128,300

Company2014

Deferred tax assets /(liabilities) in relation to:Property, plant & equipment 16,771,585 (17,467,355) (695,770)Unrealised exchange (gain)/loss - (7,127,736) (7,127,736)Provision for doubtful debts 699,343 (310,038) 389,305Other provisions 888,183 (178,991) 709,192 Total 18,359,111 (25,084,120) (6,725,009)

2013

Deferred tax assets /(liabilities) in relation to:Property, plant & equipment 7,339,233 9,432,352 16,771,585Provision for doubtful debts 647,763 51,580 699,343Other provisions 120,070 768,113 888,183Total 8,107,066 10,252,045 18,359,111


31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦ '000 ₦ '000 ₦ '000 ₦ '000


31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦ '000 ₦ '000 ₦ '000 ₦ '000

Opening Recognised in Effect of Closing balance profit or loss currency balance

translation ₦’000 ₦’000 ₦’000 ₦’000

2013 Opening Recognised in Effect of Closing balance profit or loss currency balance

translation ₦’000 ₦’000 ₦’000 ₦’000

Opening Recognised in Closing balance profit or loss balance

₦’000 ₦’000 ₦’000

Opening Recognised in Closing balance profit or loss balance

₦’000 ₦’000 ₦’000


32


31 DECEMBER 2014

14.4 Pioneer StatusThe pioneer status of lines 1&2 of our Obajana plant and Gboko plant expired on 31st December 2013. In determining the tax liability, the Directors have exercised our right of election in line with the commencement rule in Part IV of CITA 2004. This implies that the Company will be assessed on an actual year basis for tax. This may result in a higher effective tax rate for the 2016 Financial Year.


15 Property, plant and equipment15.1 The Group Leasehold Capital improvements Plant and Motor Furniture & Work-In- & Buildings machinery Vehicles Aircraft Equipment Progress Total ₦'000 ₦'000 ₦'000 ₦'000 ₦'000 ₦'000 ₦'000Cost or deemed cost At 1st January 2013 34,570,070 314,038,199 32,749,196 1,504,557 1,392,004 136,546,504 520,800,530Additions 443,392 8,607,353 5,883,413 - 426,607 135,255,235 150,616,000 Reclassifications (25,161,934) (2,089,621) 12,475,426 - (19,989) 14,796,118 -Other reclassifications - - (5,388) - - (6,480,854) (6,486,242)Write-off/disposal (145) (13,755) (169,572) (1,504,557) (1,048) (1,413) (1,690,490)Effect of currency exchange differences 26,005,913 (473,991) 119,592 - (20,933) (32,096,495) (6,465,914)

Balance at 31st December 2013 35,857,296 320,068,185 51,052,667 - 1,776,641 248,019,095 656,773,884Additions 773,390 6,006,722 4,509,514 - 231,107 205,671,455 217,192,188 Reclassifications (Notes 15.1) 5,584,764 70,309,366 14,337,358 4,027,897 4,401 (94,263,786) - Other reclassifications (30,184) (306,898) 379,180 - (5,381) (9,821,767) (9,785,050)Disposal - (1,700,878) (688,132) - - - (2,389,010)Write-off - (737,879) (961,247) - - (69,596) (1,768,722)Effect of currency exchange differences (82,442) (247,522) (88,000) - (17,261) (1,563,432) (1,998,657)Balance at 31st December 2014 42,102,824 393,391,096 68,541,340 4,027,897 1,989,507 347,971,969 858,024,633

Accumulated depreciation and impairmentAt 1st January 2013 2,127,030 31,092,905 9,080,965 31,345 376,708 - 42,708,953Depreciation expense 1,681,394 18,921,007 12,174,221 376,139 403,410 - 33,556,171 Write-off/Disposal - (6,390) (127,245) (407,484) (1,534) - (542,653)Effect of currency exchange differences (5,277) (124,353) (270,268) - (13,805) - (413,703)

Balance at 31st December 2013 3,803,147 49,883,169 20,857,673 - 764,779 - 75,308,768Depreciation expense 1,929,449 20,614,407 12,670,214 311,196 459,370 - 35,984,636 Other reclassifications - - 379,180 - - - 379,180 Disposal - (181,643) (662,062) - - - (843,705)Write-off - (34,087) (637,642) - - - (671,729)Effect of currency exchange differences 19,810 14,076 35,760 - 4,017 - 73,663 Balance at 31st December 2014 5,752,406 70,295,922 32,643,123 311,196 1,228,166 - 110,230,813

Carrying amountsAt 31st December 2013 32,054,149 270,185,016 30,194,994 - 1,011,862 248,019,095 581,465,116At 31st December 2014 36,350,418 323,095,174 35,898,217 3,716,701 761,341 347,971,969 747,793,820

15.1 Represents transfer

15.2 Includes

15.3 Represent power plants and motor trucks disposed of during the year

15.4 Represents

(Notes 15.2)(Notes 15.3)(Notes 15.4)

(Notes 15.2)(Notes 15.3)(Notes 15.4)

from capital work in progress to various classes of assets

amount transferred to related parties, adjustment in respect of some capitalisation done in 2013 and depreciation on assets used for project work capitalised.

cost of damaged motor trucks and impairment of plant & machinery charged to profit or loss

15.5 Some borrowings are secured by a debenture on all the fixed and floating assets of the group

33


31 DECEMBER 2014

15. Plant, property and equipment15.2 The Company

Cost or deemed cost At 1st January 2013 31,222,024 309,525,230 29,652,233 1,504,557 917,545 46,823,737 419,645,326 Additions 200,979 5,625,920 5,238,651 - 258,191 96,786,147 108,109,888Reclassifications 1,264,580 345,454 12,440,150 - 62,720 (14,112,904) - Other reclassifications - - - - - (744,781) (744,781)Write off/disposal - - (169,463) 1,504,557) - (15,000) (1,689,020)

Balance at 31st December 2013 32,687,583 315,496,604 47,161,571 - 1,238,456 128,737,199 525,321,413 Additions 37,660 2,578,022 618,093 - 90,690 118,472,497 121,796,962 Reclassifications (note 15.1) 2,559,162 12,245,292 14,114,603 4,027,897 4,401 (32,951,355) -Other reclassifications (note 15.2) - (306,898) - - (5,381) (10,281,228) (10,593,507)Disposal (note 15.3) - (1,700,878) (688,132) - - - (2,389,010)Write off (note 15.4) - (737,879) (914,555) - - - (1,652,434)Balance at 31st December 2014 35,284,405 327,574,263 60,291,580 4,027,897 1,328,166 203,977,113 632,483,424

Accumulated depreciation Balance at 1st January 2013 2,102,916 30,497,754 8,897,262 31,345 251,818 - 41,781,095 Depreciation expense 1,666,503 18,587,258 11,084,907 376,139 313,351 - 32,028,158 Write off/disposal - - (127,245) (407,484) - - (534,729)

Balance at 31st December 2013 3,769,419 49,085,012 19,854,924 - 565,169 - 73,274,524 Depreciation expense 1,812,200 19,437,825 12,071,752 311,196 335,327 - 33,968,300 Disposal (note 15.3) - (181,643) (662,062) - - - (843,705)Write off (note 15.4) - (34,087) (603,086) - - - (637,173)Balance at 31st December 2014 5,581,619 68,307,107 30,661,528 311,196 900,496 - 105,761,946

Carrying amounts

At 31st December 2013 28,918,164 266,411,592 27,306,647 - 673,287 128,737,199 452,046,889 At 31st December 2014 29,702,786 259,267,156 29,630,052 3,716,701 427,670 203,977,113 526,721,478

Leasehold Capital improvements Plant and Motor Furniture & Work-In- & Buildings machinery Vehicles Aircraft Equipment Progress Total ₦'000 ₦'000 ₦'000 ₦'000 ₦'000 ₦'000 ₦'000

15.1 Represents transfer from capital work in progress to various classes of assets

15.2 Includes amount transferred to other subsidiaries and related parties, and adjustment in respect of some capitalisation done in 2013.

15.3 Represent power plants and motor trucks disposed of during the year

15.4 Represents cost of damaged motor trucks and impairment of plant & machinery charged to profit or loss

15.5 Some borrowings are secured by a debenture on all the fixed and floating assets of the company


34


31 DECEMBER 2014

16. Intangible Assets Group Computer Exploration Software Assets Total ₦'000 ₦'000 ₦'000Cost

At 1st January 2013 442,116 1,648,062 2,090,178Additions 308,157 134,055 442,212 Other reclassifications 585,749 - 585,749 Adjustment (1,867) - (1,867)Effect of foreign currency differences (35,759) (287,027) (322,786)

Balance at 31st December 2013 1,298,396 1,495,090 2,793,486 Additions 966,928 629,393 1,596,321 Other reclassifications 30,184 - 30,184 Effect of foreign currency differences 6,684 44,743 51,427 Balance at 31st December 2014 2,302,192 2,169,226 4,471,418

Amortization

At 1st January 2013 363,444 - 363,444 Amortization expense 149,335 - 149,335 Adjustment (813) (813)Effect of foreign currency differences (24,650) - (24,650)

Balance at 31st December 2013 487,316 - 487,316 Amortization expense 266,059 15,152 281,211 Effect of foreign currency differences 3,911 445 4,356 Balance at 31st December 2014 757,286 15,597 772,883

Carrying amounts

At 31st December 2013 811,080 1,495,090 2,306,170 At 31st December 2014 1,544,906 2,153,629 3,698,535

Intangible asset (Computer software) represents software which has a useful life of 3 years and is amortized on a straight line basis over these years.

Company

CostAt 1st January 2013 225,604 - 225,604 Additions 222,590 - 222,590 Other reclassification 585,749 585,749 Balance at 31st December 2013 1,033,943 - 1,033,943 Additions 243,893 - 243,893 Balance at 31st December 2014 1,277,836 - 1,277,836

Amortization

At 1st January 2013 224,756 - 224,756 Amortization expense 136,997 - 136,997 Balance at 31st December 2013 361,753 - 361,753 Amortization expense 233,756 - 233,756 Balance at 31st December 2014 595,509 - 595,509

At 31st December 2013 672,190 - 672,190 At 31st December 2014 682,327 - 682,327

16.1 Other reclassification represents portion of Computer software reclassified from property, plant and equipment

Computer Exploration Software Assets Total ₦'000 ₦'000 ₦'000


35


31 DECEMBER 2014

17. Information regarding subsidiaries

17.1 SubsidiariesThe Group's subsidiaries at the end of the reporting period are as follows;

Proportion

by the Group31-Dec-14 13

Sephaku Cement (Pty) Limited Cement production South Africa 64.00% 64.00%Dangote Industries (Ethiopia) Plc Cement production Ethiopia 94.00% 86.96%Dangote Industries (Zambia) Limited Cement production Zambia 75.00% 75.00%Dangote Cement Senegal S.A Cement production Senegal 90.00% 90.00%Dangote Cement Cameroon S.A Cement Grinding Cameroon 80.00% 80.00%Dangote Industries Limited, Tanzania Cement production Tanzania 70.00% 70.00%Dangote Cement Congo S.A Cement production Congo 100.00% 100.00%Dangote Cement (Sierra Leone) Limited Bagging and distribution of cement Sierra Leone 99.60% 99.60%Dangote Cement Cote D'Ivoire S.A Bagging and distribution of cement Cote D'Ivoire 80.00% 80.00%Dangote Industries Gabon S.A Cement grinding Gabon 80.00% 80.00%Dangote Cement Ghana Limited Bagging and distribution of cement Ghana 100.00% 100.00%Dangote Cement - Liberia Ltd. Bagging and distribution of cement Liberia 100.00% 100.00%Dangote Cement Marketing Senegal SA Selling and distribution Senegal 100.00% 100.00%Dangote Cement Burkina Faso SA Selling and distribution Burkina Faso 95.00% - Dangote Cement Chad SA Selling and distribution Chad 95.00% - Dangote Cement Mali SA Selling and distribution Mali 95.00% - Dangote Cement Niger SARL Selling and distribution Niger 95.00% - Dangote Industries Benin S.A. Selling and distribution Benin 98.00% - Dangote Cement Togo S.A. Selling and distribution Togo 90.00% - Dangote Cement Kenya Limited Cement production Kenya 90.00% - Dangote Quarries Kenya Limited Limestone mining Kenya 90.00% - Dangote Cement Madagascar Limited Cement production Madagascar 95.00% - Dangote Quarries Mozambique Limitada Cement production Mozambique 95.00% -

Indirect SubsidiariesNames of SubsidiariesSephaku Development (Pty) Ltd Mining right holder South Africa 100.00% 100.00%Sephaku Delmas Properties (Pty) Ltd Investment property South Africa 100.00% 100.00%Blue Waves Properties 198 (Pty) Ltd Exploration South Africa 100.00% 100.00%Sephaku Limestone and Exploration (Pty) Ltd Exploration South Africa 80.00% 80.00%Sephaku Enterprise Development (Pty) Ltd Social responsibility South Africa 100.00% 100.00%Portion 11 Klein Westerford Properties (Pty) Ltd Investment property South Africa 100.00% 100.00%

Name of subsidiary Principal Activity Place ofincorporation of ownership and operation or voting power

held 31-Dec-

Sephaku Cement (Pty) Limited

Name of Dangote Industries (Zambia) Limited subsidiaryDangote Quarries (Zambia) Limited Limestone mining Zambia 50.10% 50.10%


36


31 DECEMBER 2014


17.2 Investments Group Company

14 13 14 13 ’000 ’000 ’000 ’000Sephaku Cement (Pty) Limited - - 24,283,254 24,283,254 Dangote Industries (Ethiopia) Plc - - 1,618,936 732,657 Dangote Industries (Zambia) Limited - - 115 115 Dangote Cement Senegal S.A - - 29,448 29,448 Dangote Cement Cameroon S.A - - 8,807 8,807 Dangote Industries Limited, Tanzania - - 69,636 69,636 Dangote Cement Congo S.A - - 3,481 785 Dangote Cement (Sierra Leone) Limited - - 18,048 72,190 Dangote Cement Cote D'Ivoire S.A - - 16,044 3,082 Dangote Industries Gabon S.A - - 5,748 3,081 Dangote Cement Marketing Senegal SA - - 4,232 4,232 Dangote Cement Burkina Faso SA - - 3,238 - Dangote Cement Chad SA - - 3,238 - Dangote Cement Mali SA - - 3,238 - Dangote Cement Niger SARL - - 5,226 - Dangote Cement Madagascar Limited - 389 389 389 Dangote Industries Benin SA - - 3,354 - Dangote Cement Togo SA - - 838 - Societe des Ciments d' Onigbolo 1,582,369 1,582,369

27,659,639 26,790,045

Impairment (1,582,369) (1,582,369)Total - 389 26,077,270 25,207,676

During the year there was a conversion of receivable to investment for Dangote Industries (Ethiopia) Plc. leading to a change in interest held in the subsidiary. Investment in Dangote Cement (Sierra Leone) Limited was adjusted to reflect the correct investment value.

31-Dec- 31-Dec- 31-Dec- 31-Dec-₦ ₦ ₦ ₦

- -- 389

- -

37


31 DECEMBER 2014

17.3 Composition of the Group

Information about the composition of the Group at the end of the reporting period is as follows:Principal activity Place of incorporation Number of wholly

Cement production Congo 1 1Bagging and distribution of cement Liberia 1 1Selling and distribution Senegal 1 1Bagging and distribution of cement Ghana 1 1

Clinker & cement production South Africa 1 1Cement production Ethiopia 1 1Cement production Zambia 1 1Cement production Senegal 1 1Cement grinding Cameroon 1 1Cement production Tanzania 1 1Bagging and distribution of cement Sierra Leone 1 1Bagging and distribution of cement Cote D'Ivoire 1 1Cement grinding Gabon 1 1Selling and distribution Burkina Faso 1 -Selling and distribution Chad 1 -Selling and distribution Mali 1 - Selling and distribution Niger 1 -

Selling and distribution Benin 1 -Selling and distribution Togo 1 -

Details of Non-wholly owned subsidiaries that have material non-controlling interests

The table below shows details of non-wholly owned subsidiaries of the Group that have material non-controlling interests:

Name of subsidiary Place of incorporation

controlling interests

2014 2013 2014 2013 2014 2013 ’000 ’000 ’000 ’000Sephaku Cement (Pty) Ltd South Africa 36.00% 36.00% 648,996 (239,798) 6,688,858 5,869,358

and operation owned subsidiaries 2014 2013

Principal activity Place of incorporation Number of non-wholly and operation owned subsidiaries 2014 2013

Cement production Kenya 2 -Cement production Madagascar 1 -

Cement production Mozambique 1 -

Proportion of Profit/(loss)allocated Accumulated nonownership interests to non-controlling -controlling interests

and principal and voting rights interests place of held by non-

business

₦ ₦ ₦ ₦


38


31 DECEMBER 2014

17.3 Summarised below is the financial information in respect of the Group’s subsidiary that has material non-controlling interests. Information below represent amounts before intragroup eliminations.

Sephaku Cement (Pty) Limited 2014 2013 ₦'000 ₦'000The information in respect of the financial position of the subsidiariesCurrent assets 7,095,743 1,969,598 Non-current assets 59,581,656 50,131,941 Current liabilities 10,922,829 5,400,234 Non-current liabilities 37,174,409 30,397,532 Equity attributable to owners of the Company 18,502,142 16,225,754 Non-controlling interests 78,019 78,019

Information in respect of the profit and loss and other comprehensive income

Revenue 13,909,542 599,906 Expenses (14,189,855) (1,451,176)Tax credit 2,083,079 185,165Profit/(loss) for the year 1,802,766 (666,105)

Profit/(loss) attributable to owners of the Company 1,153,770 (426,307)Profit/(loss) attributable to the non-controlling interests 648,996 (239,798)Profit/(loss) for the year 1,802,766 (666,105)

Other comprehensive income attributable to owners of the Company - -

Other comprehensive income for the year - -

Total comprehensive income attributable to owners of the Company 1,153,770 (426,307)Total comprehensive income attributable to the non-controlling interests 648,996 (239,798)Total comprehensive income for the year 1,802,766 (666,105)

Information in respect of the cash flows of the subsidiaries

Dividends paid to non-controlling interests - -

Net cash inflow from operating activities 365,780 668,675

Net cash outflow from investing activities (7,008,072) (7,813,156)

Net cash inflow from financing activities 7,229,735 7,710,667

Net cash inflow 587,443 566,186


39


31 DECEMBER 2014

17.4 Change in the Group’s ownership interest in a subsidiaryThere was no disposal of investment in any of the subsidiaries undertaken by the Company during the reporting year, however there was a change in the interest held in Dangote Industries (Ethiopia) Plc. (see note 17.1).

17.5 Significant restrictionsThere are no significant restrictions on the Company’s or its subsidiaries’ ability to access or use its assets to settle the liabilities of the Group.

17.6 Financial Support to consolidated structured entitiesDuring the year, the Company provided financial support to its subsidiaries for capital development and/or for operational purposes. Assistance rendered was always in the form of funds transferred to them for the normal running of their operations or on their behalf to vendors/contractors for settlement of commitments.

As part of the requirements of the Syndicated Term Loan of R1.95bn facility from Nedbank Capital and Standard Bank of South Africa for the finance of the Group’s South African plant in 2012, the Company extended an interest bearing subordinated loan to Sephaku Cement to the tune of R265 Million as a guarantee to help access the remainder of its loan with Nedbank/Standard Bank. This loan is expected to be repaid in two tranches at an interest rate of Johannesburg Inter-Bank Agreed Rate (JIBAR) plus 4% per annum but in order for the Company to fulfil this, it entered into a contractual obligation with Zenith Bank Plc. to avail a credit facility for a Term Loan to be on lent to Sephaku Cement Limited. The loan has a quarterly interest rate payment of 6% per annum and is expected to have a bullet repayment of principal upon maturity which is 48 months from the date the loan was advanced. In addition, the loan has been secured by a debenture over all fixed and floating assets of Dangote Cement Plc.

All financial support given on behalf of the subsidiaries have been accounted for as receivables from subsidiaries and eliminated on consolidation.The table below shows the financial support given to major subsidiaries by the Company during the year:

2014 2013 ’000 ’000Dangote Cement Ghana Limited 689,659 2,571,478 Dangote Cement Senegal S.A 6,334,923 13,430,214 Dangote Industries (Zambia) Limited 20,315,511 10,291,555 Dangote Cement Cameroon S.A 4,207,768 6,423,823 Dangote Industries (Ethiopia) Plc 13,793,231 23,309,076 Dangote Industries Limited, Tanzania 21,972,294 18,646,285 Dangote Cement (Sierra Leone) Limited 837,923 1,043,736 Dangote Cement Congo S.A 13,118,619 540,545 Dangote Cement Cote D'Ivoire S.A 475,661 380,346 Dangote Industries Gabon S.A - 16,616 Dangote Cement Liberia Ltd. 27,687 114,221 Total 81,773,276 76,767,895

The Group management has continued to show intentions to provide financial support to its subsidiaries and to assist, when necessary, any subsidiary to obtain financial support in the future and does not envisage any material risk as a result of this. Interest charged to the subsidiaries on the advances extended to them during the year was between 7% to 10%.

₦ ₦


40


31 DECEMBER 2014

18. Prepayments Group Company18.1 Prepayments for property, plant & equipment 31-Dec-14 13 14 13 ’000 ’000 ’000 ’000Non-currentAdvance to contractors 79,490,715 91,715,470 1,772,564 23,950,013 Total non-current prepayments 79,490,715 91,715,470 1,772,564 23,950,013

18.2 Prepayments and other current assets

Advance to contractors 26,623,838 23,301,601 25,542,639 20,941,803 Deposits for imports 17,880,447 12,616,503 17,880,447 12,602,408 Rent, rates and insurance 2,203,153 1,095,512 1,858,130 1,008,243 Total current prepayments 46,707,438 37,013,616 45,281,216 34,552,454

Related party transactionsParent company - - - -

Entities controlled by the parent company 10,937,734 2,158,775 10,937,734 1,772,677 Affiliates and associates of parent company 537,602 473,441 537,602 473,441 Total related party transactions 11,475,336 2,632,216 11,475,336 2,246,118 Prepayments and other current assets 58,182,774 39,645,832 56,756,552 36,798,572

Non-current advances to contractors represent various advances made to contractors for the construction of plants while current advances to contractors represent various advances made for the purchase of LPFO, AGO, coal and other materials which were not received at the year end.

Group Company14 13 14 13

₦'000 ₦'000 ₦'000 ₦'00019. Inventories

Finished product 4,303,990 3,022,790 2,973,154 2,539,486 Work-in-progress 4,754,100 1,705,281 2,603,110 1,613,305 Raw materials 3,930,796 3,002,453 3,014,644 1,614,985 Packaging materials 1,323,521 1,221,501 995,089 1,120,276 Consumables 4,233,467 3,968,817 4,160,525 3,906,947 Fuel 9,248,920 3,717,367 9,170,970 3,680,771 Spare parts 13,473,400 9,434,740 12,875,023 8,988,935 Goods in transit 1,419,646 1,594,339 522,064 112,041

42,687,840 27,667,288 36,314,579 23,576,746

The cost of inventories recognised as an expense during the year was 85.87 billion and 79.98 billion (2013: 67.2 billion and 66.1 billion) in the consolidated and separate financial statements respectively.

31-Dec- 31-Dec- 31-Dec-₦ ₦ ₦ ₦

31-Dec- 31-Dec- 31-Dec- 31-Dec-

₦ ₦₦ ₦


41


31 DECEMBER 2014

20. Trade and other receivables

31-Dec- 31-Dec- 31-Dec- 31-Dec-

₦ ₦

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦'000 ₦'000 ₦'000 ₦'000

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦'000 ₦'000 ₦'000 ₦'000

Group Company 14 13 14 13 ₦'000 ₦'000 ₦'000 ₦'000Trade receivables 5,526,204 9,386,389 2,398,315 9,093,143Impairment allowance on trade receivables (1,303,443) (2,716,140) (1,297,685) (2,632,625)

4,222,761 6,670,249 1,100,630 6,460,518

Deposit for supplies 5,836,896 2,244,611 5,530,589 1,222,038 Staff loans and advances 656,153 640,723 619,620 602,606 Other receivables 4,924,467 1,932,508 1,211,889 835,678

15,640,277 11,488,091 8,462,728 9,120,840

Trade ReceivablesThe average credit period on sales of goods for both the Group and Company is as shown below.

Of the trade receivables balance at the end of the year in the consolidated and separate financial statements respectively, 301 million (2013: 549 million) is due from the Group and Company’s largest trade debtor respectively. There are no other customers who represent more than 10% of the total balance of trade receivables of the Group and Company respectively.

Trade receivables disclosed above include amounts (see below for aged analysis) that are past due at the end of the reporting period for which the Group has not recognised an allowance for impairment because there has not been a significant change in credit quality and the amounts are still considered recoverable.

Trade receivables are considered to be past due when they exceed the credit period granted.

Age of receivables that are past due and not impaired

Group Company

0 - 60 days 1,219,413 2,022,057 766,831 1,984,950 60 - 90 days 186,250 129,728 117,431 129,728 90 - 120 days 83,428 2,144,764 24,581 2,144,764

Total 1,489,091 4,296,549 908,843 4,259,442

Average age (days) 27 58 25 58

Group CompanyMovement in the allowance for doubtful debts

Balance at the beginning of the year 2,716,140 1,375,331 2,632,625 1,371,050 Impairment losses recognised on receivables 6,972 1,342,630 - 1,261,575 Amounts written off during the year as uncollectible (1,334,940) - (1,334,940) -

Impairment losses reversed (84,729) (1,821) - -

Balance at the end of the year 1,303,443 2,716,140 1,297,685 2,632,625

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the end of the reporting period. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.


42


31 DECEMBER 2014

Age of past due and impaired trade receivables Group Company 14 13 14 13 ’000 ’000 ’000 ’00060-90 days - 1,345,090 - 1,261,575 90-120 days - - - - 120+ days 1,303,443 1,371,050 1,297,685 1,371,050

1,303,443 2,716,140 1,297,685 2,632,625

21. Share capital 14 13 ’000 ’000Issued and fully paidShare capital 17,040,507,405(2013: 17,040,507,405) ordinary shares of 0.5 each 8,520,254 8,520,254 Share premium 42,430,000 42,430,000 50,950,254 50,950,254

Authorised capital as at reporting dates represents 20,000,000,000 ordinary shares of 0.5 each.

Fully paid ordinary share carries one vote per share and a right to dividends when declared and approved.

22.DividendOn 2nd May 2014, a dividend of 7.00 per share (total dividend 119.28 bn) was approved by shareholders to be paid to holders of fully paid ordinary shares in relation to the 2013 financial year.

In respect of the current year, the Directors proposed that a dividend of 6.00 per share. This dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these consolidated and separate financial statements.

23. Trade and other payables Group Company 14 13 14 13 ₦'000 ₦'000 ₦'000 ₦'000Trade payables 34,535,123 23,433,122 33,084,985 21,069,878 Payable to contractors 19,015,061 12,974,879 9,062,666 11,065,492 Value added tax 5,740,652 11,073,872 5,740,652 11,073,872 Withholding tax payable 3,694,683 564,750 1,231,477 556,404Staff pension (Note 27.1) 133,606 135,787 94,088 131,390Interest payable 6,622,738 5,797,524 6,622,738 5,797,524

Other accruals and payables 21,836,094 16,078,809 15,513,897 11,760,355 100,929,998 83,437,532 80,407,479 74,511,377

The average credit period on purchases of goods is 94 days (2013: 66 days). Normally, no interest is charged on trade payables. The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

31-Dec- 31-Dec- 31-Dec- 31-Dec-₦ ₦ ₦ ₦

Group and Company 31-Dec- 31-Dec-

₦ ₦

₦

₦

₦ ₦

₦

31-Dec- 31-Dec- 31-Dec- 31-Dec-

Advances from customers 9,352,041 13,378,789 9,056,976 13,056,462


43


31 DECEMBER 2014

Group Company24. Borrowings 14 13 14 13 ’000 ’000 ’000 ’000Unsecured borrowings at amortised costSubordinated loans (Note 24(a)) 29,988,945 29,996,737 29,988,945 29,996,737 Loans from Dangote Industries Limited 125,000,000 45,000,000 125,000,000 45,000,000 Bulk Commodities loans 514,214 514,214 514,214 514,214

155,503,159 75,510,951 155,503,159 75,510,951 Secured borrowings at amortised cost

Power intervention loan (Note 24 (b) ) 16,743,303 18,481,074 16,743,303 18,481,074 Bank loans 70,335,144 87,147,755 29,630,633 56,518,482

87,078,447 105,628,829 46,373,936 74,999,556

Total borrowings at 31st December 2014 242,581,606 181,139,780 201,877,095 150,510,507

Long-term portion of loans and borrowings 131,941,708 124,850,394 95,435,088 95,079,111

Current portion repayable in one year and shown under current liabilities 106,450,224 55,433,696 106,442,007 55,431,396 Overdraft balances 4,189,674 855,690 - -

110,639,898 56,289,386 106,442,007 55,431,396

(a) A subordinated loan of 55.4 billion was obtained by the Company from Dangote Industries Limited in 2010. 30 billion was long-term and the remaining balance was short term and is repayable on demand. The long-term

loan is unsecured, with interest at 10% per annum and is repayable in 3 years after a moratorium period ending 31 March 2017. The interest on the long term portion was waived for 2011. Given the favourable terms at which the Company secured the loan, an amount of 2.8 billion which is the difference between the fair value of the loan on initial recognition and the amount received, has been accounted for as capital contribution.

(b) In 2011 and 2012, the Bank of Industry through Guaranty Trust Bank Plc and Access Bank Plc granted the Company a 24.5 billion long-term loan repayable over 10 years at an all-in annual interest rate of 7% for part financing or refinancing the construction cost of the power plants at the Company’s factories under the Power and Aviation Intervention Fund. The loan has a moratorium of 12 months. Given the concessional terms at which the Company secured the loan, it is considered to have an element of government grant. Using prevailing market interest rates for an equivalent loan of 12.5%, the fair value of the loan is estimated at 20.7 billion. The difference of 3.8 billion between the gross proceeds and the fair value of the loan is the benefit derived from the low interest loan and is recognised as deferred revenue. The facility is secured by a debenture on all fixed and floating assets of the Company to be shared pari passu with existing lenders.

31-Dec- 31-Dec- 31-Dec- 31-Dec-₦ ₦ ₦ ₦

₦₦

₦

₦

₦₦


44


31 DECEMBER 2014

Group Currency Nominal Maturity 14 13

’000 ’000

Bank overdrafts On demand 4,189,674 855,690

Other borrowingsSubordinated loans from Parent company Naira 10% 12/2019 29,988,945 29,996,737 Other loans from Parent Company Naira 10% 12/2019 125,000,000 45,000,000 Loan from Bulk Commodities Inc. Naira 6% On demand 514,214 514,214 Power intervention loan Naira 7% 07&12/2021 16,743,303 18,481,074 Syndicated Bank loans Naira 10-15% 12/2013&2014 - 5,333,333 Short term Loans from Banks USD 6% 2015 29,630,633 51,185,149 Nedbank/Standard Bank Loan Rands 9.95% 11/2022 36,514,837 29,773,583

238,391,932 180,284,090 Total borrowings at 31st December 242,581,606 181,139,780

Company Currency Nominal Maturity 14 13

Other borrowingsSubordinated loans Naira 10% 12/2019 29,988,945 29,996,737 Loans from parent Company Naira 10% 12/2019 125,000,000 45,000,000 Loan from Bulk Commodities Inc. Naira 6% On demand 514,214 514,214 Power intervention loan Naira 7% 07 & 12/2021 16,743,303 18,481,074 Syndicated bank loans Naira 10-15% 12/2013 & 2014 - 5,333,333 Short term loans from banks USD 6% 2015 29,630,633 51,185,149 Total borrowings at 31st December 201,877,095 150,510,507

The maturity profile of borrowings is as follows: Group Company 14 13 14 13 ’000 ’000 ’000 ’000Due within one month 4,596,556 6,930,926 406,349 6,075,046 Due from one to three months 251,065 1,333,727 250,000 1,333,333 Due from three to twelve months 105,792,277 48,024,733 105,785,658 48,023,017

Total current portion repayable in one year 110,639,898 56,289,386 106,442,007 55,431,396

Due in the second year 7,849,601 6,879,342 2,625,397 2,625,397 Due in the third year 7,849,601 6,879,570 2,625,397 2,625,397 Due in the fourth year 37,208,790 34,137,474 31,984,586 29,883,047 Due in the fifth year and further 79,033,716 76,954,008 58,199,708 59,945,270 Total long-term portion of loans and borrowings 131,941,708 124,850,394 95,435,088 95,079,111 Total 242,581,606 181,139,780 201,877,095 150,510,507

31-Dec- 31-Dec-interest on demand ₦ ₦rate

31-Dec- 31-Dec-interest

rate ₦’000 ₦’000

31-Dec- 31-Dec- 31-Dec- 31-Dec-₦ ₦ ₦ ₦


45


31 DECEMBER 2014

25 Deferred Revenue

31-Dec- 31-Dec- 31-Dec- 31-Dec-₦ ₦ ₦ ₦

25.1 Deferred revenue arising from government grant (refer to (a) below

31-Dec- 31-Dec- 31-Dec- 31-Dec-₦’000 ₦’000 ₦’000 ₦’000

31-Dec- 31-Dec- 31-Dec- 31-Dec- ₦’000 ₦’000 ₦’000 ₦’000

Balance at the end of the year 4,011,388 376,665 294,515 233,856


’000 ’000 ’000 ’000

1,868,501 2,410,237 1,868,501 2,410,237 Current 478,616 541,736 478,616 541,736 Non-current 1,389,885 1,868,501 1,389,885 1,868,501

1,868,501 2,410,237 1,868,501 2,410,237

a) The deferred revenue mainly arises as a result of the benefit received from government loans received in 2011 and 2012 (see note 24b). The revenue was recorded in the other income line.

Movement in Deferred revenue Group Company

14 13 14 13 At 1st January 2,410,237 3,012,492 2,410,237 3,012,338 Released to profit and loss account (Other income) (541,736) (602,255) (541,736) (602,101)Closing balance 1,868,501 2,410,237 1,868,501 2,410,237

25.2 Other current liabilities

Current portion of deferred revenue ( Note 25.1) 478,616 541,736 478,616 541,736

Related party transactionsParent company 5,695,682 7,476,324 5,695,682 7,815,606 Entities controlled by the parent company 5,925,230 14,445,936 5,358,926 10,470,145 Affiliates and associates of parent company 6,797,958 2,009,958 4,965,748 1,656,849

18,418,870 23,932,218 16,020,356 19,942,600

Other current liabilities 18,897,486 24,473,954 16,498,972 20,484,336

26 Provisions for liabilities and other charges Group Company

14 13 14 13

Balance at beginning of the year 376,665 487,310 233,856 274,782 Effect of foreign exchange differences (20,560) (93,586) - - Provisions made during the year 259,382 (50,031) 32,596 (73,898)Unwinding of discount 28,063 32,972 28,063 32,972

643,550 376,665 294,515 233,856 Witholding tax payables 3,367,838 - - -

The above provisions represent:�The Group’s obligations to settle environmental restoration and dismantling / decommissioning cost of property, plant and equipment. The expenditure is expected to be utilised at the end of the useful lives of the mines which is estimated to be between the years 2025 to 2035.

�Non current witholding tax on loan from the parent company intended to be remitted to tax authorities as and when due.


46


31 DECEMBER 2014

27. Employee Benefits


Balance at beginning of the year 135,787 169,658 131,390 169,658

Provision for the year 721,554 512,191 447,719 507,794

Payments during the year (723,735) (546,062) (485,021) (546,062)Balance at the end of the year 133,606 135,787 94,088 131,390

Provisions for staff pensions have been made in the financial statements in accordance with the Pension Reform Act 2004. The accrual at 31st December 2014 amounted to 134 million (2013: 136 million) for the group.

Outstanding staff pension deductions that have not been remitted as at year end have been accrued for in accordance with the Pension Reform Act, 2004. The employees of the Group are members of a State arranged Pension scheme which is managed by several private sector service providers. The Group is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the defined contribution plan is to make the specified contributions.The total expense recognised in profit or loss of 722 million (2012: 512 million) represents contributions payable to these plans by the Group at rates specified in the rules of the plans.

27.2 Defined benefit planThe Group operates a funded defined benefit plan (gratuity) for qualifying employees of the Group. Under the plan, the employees are entitled to a lump sum benefits on attainment of a retirement age or on disengagement after contributing a specific number of years in service. No other post-retirement benefits are provided to these employees. The most recent actuarial valuations of the present value of the defined benefit obligation were carried out at 31 December 2014 by HR Nigeria Limited. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

The plan typically exposes the Group to actuarial risks such as; investment risk, interest rate risk, longevity risk and salary risk.

Investment Risk The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to high quality corporate bond yields; if the return on plan assets is below this rate, it will create a plan deficit. Currently the plan has a relatively balanced investment in Government Securities and money market instruments. Due to the long-term nature of the plan liabilities, the board of the pension fund considers it appropriate that a reasonable portion of the plan assets should be invested in equity securities and in real estate to leverage the return generated by the fund

Interest Rate Risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s debt investments.

Salary Risk The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

27.1 Defined contribution plans

31-Dec- 31-Dec- 31-Dec- 31-Dec-₦’000 ₦’000 ₦’000 ₦’000

₦ ₦

₦ ₦

Longevity risk The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants during their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability


47


31 DECEMBER 2014

The principal assumptions used for the purposes of the actuarial valuations were as follows:

Group & Company14 13% %

Discount rate(s) 15 14 Expected rate(s) of salary increase 12 12Inflation rate 9 9

Movements in the fair value of plan assets are as follows: Group & Company

14 13 ’000 ’000At 1st January 626,221 358,259 Interest income 103,947 59,070 Remeasurement loss- Return on plan assets excluding amounts included in net interest expense (40,228) (3,772)Contributions by employer 273,918 212,664 At 31st December 963,858 626,221

Movements in the present value of the defined benefit obligation are as follows: Group & Company

14 13 ’000 ’000At 1st January 2,588,861 2,101,935 Current service cost 620,844 582,987 Interest cost 355,976 271,345 Remeasurement (gains)/losses- Actuarial gain (489,945) (284,262)Benefits paid (42,418) (83,144)

The major categories of plan assets, and the expected rate of return at the end of the reporting period for each category, are as follows:

14 13 14 13 % % Government securities 12 12 496,472 415,493Cash - - 12,217 40Money market instruments 13 14 469,672 218,163

978,361 633,696Liability on plan assets (14,503) (7,475)

963,858 626,221 The fair value of the above assets are based on quoted prices in active marketsThe actual return on plan assets was 63.7 (2013: 55.3 ).

The Group expects to make a contribution of 250 million (2013: 200 million) to the defined benefit plans during the next financial year.

31-Dec- 31-Dec-

31-Dec- 31-Dec-₦ ₦

31-Dec- 31-Dec-₦ ₦

At 31st December 3,033,318 2,588,861

31-Dec- 31-Dec- 31-Dec- 31-Dec-₦’000 ₦’000

₦ million ₦ million

₦ ₦


48


31 DECEMBER 2014

Amounts recognised in profit or loss in respect of these defined benefit plans are as follows:

Group & Company14 13

Current service cost 620,844 582,987 Net Interest expense 252,029 212,275

872,873 795,262

Amounts recognised in other comprehensive income are as follows Group & Company

14 13

Remeasurement on the net defined liabilityActuarial gain on defined benefit obligation 489,945 284,262 Return on plan assets (excluding amounts included in net interest) (40,228) (3,772)

449,717 280,490

The amount included in the consolidated and separate statement of financial position arising from the entity’s obligation in respect of its defined benefit plans is as follows:

Group & Company14 13

Present value of defined benefit obligations 3,033,318 2,588,861 Fair value of plan assets (963,858) (626,221)Net liability arising from defined benefit obligation 2,069,460 1,962,640

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes • If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by

345 million (increase by 412 million) (2013: decrease by 320 million (increase by 387 million)).• If the expected salary growth increases (decreases) by 1%, the defined benefit obligation would increase by

435 million (decrease by 367 million) (2013: increase by (decrease by )).

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the statement of financial position.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

The average duration of the benefit obligation at 31st December 2014 is 15 years (2013: 16 years).

31-Dec- 31-Dec-₦’000 ₦’000

31-Dec- 31-Dec- ₦’000 ₦’000

31-Dec- 31-Dec- ₦’000 ₦’000

₦ ₦ ₦ ₦

₦ ₦ ₦403 million ₦338 million• If the assumed mortality age is rated up (down) by 1year, the defined benefit obligation would increase by

₦24 million (decrease by ₦22 million) (2013: increase by ₦20 million (decrease by ₦18 million)).


49


31 DECEMBER 2014

28. Financial Instruments

28.1 Capital ManagementThe Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.The capital structure of the Group consists of net debt (borrowings as detailed in note 24 offset by cash and bank balances) and equity of the Group (comprising issued capital, reserves, retained earnings and non-controlling interests as detailed below.

Group Company 14 13 14 13 N’000 N’000 N’000 N’000Net debt 221,988,466 110,638,197 185,527,584 83,067,645 Equity 591,886,155 550,093,270 638,543,114 571,562,826

The Group's risk management committee reviews the capital structure of the Group on a semi-annual basis. As part of this review, the committee considers the cost of capital and the risks associated with each class of capital. The Group endeavours to maintain an optimum mix of net gearing ratio which provides benefits of trading on equity without exposing the Group to any undue long term liquidity risk. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions. To maintain the capital or adjust the capital structure, the Group may adjust the dividend payment to shareholders, issue new and/or bonus shares, or raise debts in favourable market conditions.

The net debt to equity ratio as at 31st December 2014 is 38% (2013: 20%). The Group is anticipating this will increase going forward.

28.1.1Debt to equity ratioThe debt to equity ratio at end of the reporting period was as follows: Group Company

Debt (Note 24) 242,581,606 181,139,780 201,877,095 150,510,507Cash and bank balances (Note 30.1) 20,593,140 70,501,583 16,349,511 67,442,862Net debt 221,988,466 110,638,197 185,527,584 83,067,645Equity 591,886,155 550,093,270 638,543,114 571,562,826 Net debt/ Equity ratio 38% 20% 29% 15%

28.2 Categories of financial instruments Group Company

Financial assets- Loans and receivablesCash and bank balances 10,458,447 19,007,633 6,214,818 15,948,908 Short term deposits 10,134,693 51,493,950 10,134,693 51,493,954 Trade and other receivables(Note 28.2.1) 9,803,381 9,243,480 2,932,139 7,898,802 Due from related parties and receivables from subsidiaries 11,475,336 2,632,216 288,625,075 166,770,999 Total financial assets 41,871,857 82,377,279 307,906,725 242,112,663

Financial liabilities- at amortised costTrade and other payables (Note 28.2.2) 91,494,663 71,798,910 73,435,350 62,881,101 Bank loans 82,888,773 104,773,139 46,373,936 74,999,556 Overdraft 4,189,674 855,690 - - Inter-company borrowings 155,503,159 75,510,951 155,503,159 75,510,951 Due to related parties 18,418,870 23,932,218 16,020,356 19,942,600 Total financial liabilities 352,495,139 276,870,908 291,332,801 233,334,208

28.2.1Defined as total trade and other receivables excluding prepayments, accrued income and amounts relating to taxation.

31-Dec- 31-Dec- 31-Dec- 31-Dec-

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 N’000 N’000 N’000 N’000

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 N’000 N’000 N’000 N’000


50


31 DECEMBER 2014

28.2.2 Defined as total trade and other payables excluding taxation.

28.3 Financial Risk Management ObjectivesThe Group's Corporate Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group and analyses exposures by degree and magnitude of risks. These risks include market risk, credit risk, and liquidity risk

28.4 Market RiskThe Group's activities expose it primarily to the financial risks of changes in foreign currency exchange rates (Note 28.5.1) and interest rates (Note 28.7.1).

28.5 Foreign Currency Risk ManagementThe Group undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The carrying amounts of the Group and Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows.

Group

14 13 14 13 ’000 ’000 ’000 ’000US Dollars 21,251,974 56,976,357 1,231,189 851,080

Company Liabilities Assets

US Dollars 21,250,217 52,436,477 275,112,906 391,204

28.5.1 Foreign Currency Sensitivity AnalysisThe Group is mainly exposed to US Dollars. The following table details the Group and Company’s sensitivity to a 15% (2013: 3%)increase and decrease in the Naira against the US Dollar. 15% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 15% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the Group where the denomination of the loan is in a currency other than the functional currency of the lender or the borrower. A positive number below indicates an increase in profit or equity for a 15% change in the exchange rates. A negative number below indicates a decrease in profit or equity for a 15% change in the exchange rates.

Group Company

Effect on Profit or loss/Equity for a 15% (2013:3%) appreciation 2,102,053 1,683,758 (26,655,582) 1,561,358Effect on Profit or loss/Equity for a 15% (2013:3%) depreciation (2,102,053) (1,683,758) 26,655,582 (1,561,358 )

This is mainly attributable to the exposure outstanding on US dollar receivables and payables at the end of the reporting period.

Liabilities Assets31-Dec- 31-Dec- 31-Dec- 31-Dec-

₦ ₦ ₦ ₦

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦’000 ₦’000 ₦’000 ₦’000

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦’000 ₦’000 ₦’000 ₦’000


51


31 DECEMBER 2014

28.6 Credit Risk ManagementCredit risk refers to the risk that counterparties will default on their contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties.

The Group's and Company’s business is mainly on a cash basis. Revolving credits granted to major distributors and very large corporate customers approximate about 5 billion and these are payable within 15-30 days. Stringent credit control is exercised at the granting of credit, this is done through the review and approval by executive management based on the recommendation of the independent credit control group.

Credits to major distributors are guaranteed against bank guarantee with an average credit period of no more than 15 days.

For very large corporate customers, clean credits are granted based on previous business relationships and positive credit worthiness which is performed on an on-going basis. These credits are usually payable at no more than 30 days.

The Group and the Company do not have significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The Group defines counterparties as related entities with similar characteristics. There is no material single obligor exposure to report.

Trade receivables consist of a large number of customers, spread across diverse geographical areas. On-going credit evaluation is performed on the financial condition of accounts receivable.

The credit risk on liquid funds financial instruments is limited because the counterparties are banks with high credit-ratings assigned by credit-rating agencies.

₦


52


31 DECEMBER 2014

28.6.1 Maximum Exposure to Credit Risk

31-Dec- 31-Dec- 31-Dec- 31-Dec-₦ ₦ ₦ ₦

9,803,381 9,243,480 2,932,139 7,898,802

41,871,857 82,377,279 307,906,725 242,112,663

<1 month 1– 3 months 3 mths – 1yr 1 - >5 yrsAs at 31st December 2014 ₦’000 ₦’000 ₦’000 ₦’000Financial debt 5,055,688 2,853,654 115,099,233 161,541,511 Trade payables 34,535,123 - - - Other payables 56,959,540 - - - Due to related parties 18,418,870

114,969,221 2,853,654 115,099,233 161,541,511

<1 month 1– 3 months 3 mths – 1yr 1 - >5 yrs ₦’000 ₦’000 ₦’000 ₦’000

Financial debt

3,808,567 57,269,342 170,818,874

<1 month 1– 3 months 3 mths – 1yr 1 - >5 yrsAs at 31st December 2014 ₦’000 ₦’000 ₦’000 ₦’000Financial debt 542,945 2,238,730 112,231,407 117,630,193 Trade payables 33,084,985 - - - Other payables 40,350,365 - - - Due to related parties 16,020,356

89,998,651 2,238,730 112,231,407 117,630,193

<1 month 1– 3 months 3 mths – 1yr 1 - >5 yrsAs at 31st December 2013 ₦’000 ₦’000 ₦’000 ₦’000Financial debt 6,231,762 3,323,899 54,530,263 125,845,291Trade payables 21,069,878 - - - Other payables 41,811,223 - - - Due to related parties 19,942,600

89,055,463 3,323,899 54,530,263 125,845,291

Group Company 14 13 14 13 ’000 ’000 ’000 ’000Financial assets- loans and receivablesCash and bank balances 10,458,447 19,007,633 6,214,818 15,948,908 Short term deposits 10,134,693 51,493,950 10,134,693 51,493,954 Trade and other receivables Due from related parties 11,475,336 2,632,216 288,625,075 166,770,999

28.7 Liquidity Risk ManagementThe Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, debentures and preference shares. The Group has access to sufficient sources of funds directly from external sources as well as from the Group's parent with some sources placing covenants through the Group's parent company, none of which has been breached.

28.7.1 Liquidity Maturity TableThe following tables detail the Group and Company’s remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and the Company can be required to pay. The tables below include both interest and principal cash flows for the Group.

Group

As at 31st December 2013 7,305,863 3,808,567 57,269,342 170,818,874

Trade payables 23,433,122 - - - Other payables 48,365,788 - - - Due to related parties 23,932,218

103,036,991

Company


53


31 DECEMBER 2014

Interest Risk The following table details the sensitivity to a 1% increase or decrease in LIBOR (2013: 2% increase or decrease in MPR), which is the range of margin by which the Group and Company envisage changes to occur in 2015.

Sephaku’s floating interest loan was tested for sensitivity using a 2% (2013: 0.5%) change in rates which is the average change in JIBAR over the last year. Group Company

Effect on Profit or loss/Equity for a 1% (2013:2%) increase in rate (148,772) (202,130) 1,777,125 (53,333)

Effect on Profit or loss/Equity for a 1% (2013:2%) decrease in rate 148,772 202,130 (1,777,125) 53,333

28.7.2 Fair valuation of financial assets and liabilitiesThe carrying amount of trade and other receivables, cash and bank balances and amounts due from and to related parties as well as trade payables, other payables approximate their fair values because of the short-term nature of these instruments and, for trade and other receivables, because of the fact that any loss from recoverability is included in impairment loss. The fair values of loans and borrowings are determined using the effective interest method. For loans and borrowings payable at fixed rates fair value has been estimated by reference to the market rates available at the balance sheet date for similar instruments of maturity equal to the remaining fixed period. Management has determined that the fair value of loans and borrowings is not significantly different from their carrying amount.

29. Related Party TransactionsBalances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation. Details of transactions between the Group and Company, and other related parties are disclosed below.

The Group and the Company, in the normal course of business, sells to and buys from other business enterprises that fall within the definition of a ‘related party’ contained in International Accounting Standard 24. These transactions mainly comprise purchases, sales, finance costs and management fees paid to shareholders. The companies in the Group also provide funds to and receive funds from each other as and when required for working capital financing and capital projects.

29.1 Trading transactionsDuring the year, Group entities entered into the following trading transactions with related parties that are not members of the Group:

Sale of goods Purchases of goods 14 13 14 13 ’000 ’000 ’000 ’000Parent company - - - -Entities controlled by the parent company 42,540 175,992 35,514,183 18,110,749

During the year the company entered into the following trading transactions with related parties: Sale of goods Purchases of goods

Parent company - - - - Entities controlled by the parent company 42,540 175,992 28,191,078 17,411,045

Sales to and purchases from related parties are made at normal market prices. Outstanding balances at year end are unsecured and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables.

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦’000 ₦’000 ₦’000 ₦’000

31-Dec- 31-Dec- 31-Dec- 31-Dec-₦ ₦ ₦ ₦

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦’000 ₦’000 ₦’000 ₦’000


54


31 DECEMBER 2014

The following balances were outstanding at the end of the reporting period:

Group Amounts owed by related parties Amounts owed to related parties

CurrentParent company - - 5,695,682 7,476,324 Entities controlled by the parent company 10,937,734 2,158,775 5,925,230 14,445,936

Affiliates and associates of parent company 537,602 473,441 6,797,958 2,009,95811,475,336 2,632,216 18,418,870 23,932,218

Company Amounts owed by related parties Amounts owed to related parties

Non CurrentEntities controlled by the company 277,149,739 164,524,881 - -

The above balances represents expenditures on projects in African countries. As these are not likely to be repaid within the next twelve months, they have been classified under non-current assets.

CurrentParent company - - 5,695,682 7,815,606 Entities controlled by the parent company 10,937,734 1,772,677 5,358,926 10,470,145 Affiliates and associates of the parent company 537,602 473,441 4,965,748 1,656,849

11,475,336 2,246,118 16,020,356 19,942,600

Sales of goods to related parties were made at the Group and Company’s usual price lists, Purchases were made at market price discounted to reflect the quantity of goods purchased and the relationships between the parties.

The amounts outstanding are unsecured and will be settled in cash. No expense has been recognised in the current or prior years for bad or doubtful debts in respect of the amounts owed by related parties.

29.2 Loans from related parties Group Company

Loans from affiliates and associates of the parent company 514,214 514,214 514,214 514,214 Loans from parent company 154,988,945 74,996,737 154,988,945 74,996,737

Except as described in note 24 (a), the Group has been providing loans at rates and terms comparable to the average commercial rate of interest terms prevailing in the market. The loans are unsecured.

29.3 Compensation of key management personnelThe remuneration of directors and other members of key management personnel during the year was as follows: Group Company

Short-term benefits 254,065 137,104 254,065 137,104 Provision for staff pension benefits - 7,885 - 7,885

254,065 144,989 254,065 144,989

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦’000 ₦’000 ₦’000 ₦’000

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦’000 ₦’000 ₦’000 ₦’000

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦’000 ₦’000 ₦’000 ₦’000

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦’000 ₦’000 ₦’000 ₦’000


55


31 DECEMBER 2014

Other related party transactionsIn addition to the above, Dangote Industries Limited performed certain administrative services for the Company, for which a management fee of 1.048 billion (2013: 877 million) was charged and paid, being an appropriate allocation of costs incurred by relevant administrative departments.

30. Supplemental Cash Flow Disclosures

30.1 Cash and cash equivalents Group Company

Cash and bank balances 10,458,447 19,007,633 6,214,818 15,948,908Short term deposits 10,134,693 51,493,950 10,134,693 51,493,954

20,593,140 70,501,583 16,349,511 67,442,862 Bank overdrafts used for cash management purposes (4,189,674) (855,690) - - Cash and cash equivalents 16,403,466 69,645,893 16,349,511 67,442,862

31. Operating Lease ArrangementsOperating leases relate to leases of depots with lease terms of between 1 and 3 years. The Group does not have an option to purchase the leased land at the expiry of the lease periods. The Group also entered into long term leases of land for 99 years.

Payments recognised as an expense Group Company

Minimum lease payments 1,130,538 746,802 824,497 623,549

Non-cancellable operating lease commitments Group Company

Not later than 1 year 677,789 679,519 365,581 551,204Later than 1 year and not later than 5 years 299,499 309,784 87,269 80,672Later than 5 years - - - -

977,288 989,303 452,850 631,876

32.Commitments for expenditure Group Company

Commitments for the acquisition of property, plant and equipment 305,367,181 76,975,344 135,875,042 16,601,890

33. Contingent Liabilities And Contingent AssetsNo provision has been made in these consolidated and separate financial statements for contingent liabilities in respect of litigations against the Company and its subsidiaries amounting to 1.72 billion (2013: 14.17billion). According to the solicitors acting on behalf of the Company and its subsidiaries, the liabilities arising, if any, are not likely to be significant.

34. Subsequent EventsIn January 2015, our subsidiary in Senegal commenced cement production. Our Cameroon subsidiary, Dangote Cement Cameroon SA has commenced trial production.

On 19th March, 2015 a dividend of ₦6.00 per share which will result in ₦102.2billion total dividend was recommended by the Directors for approval on the Annual General Meeting.

₦ ₦

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦’000 ₦’000 ₦’000 ₦’000

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦’000 ₦’000 ₦’000 ₦’000

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦’000 ₦’000 ₦’000 ₦’000

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 ₦’000 ₦’000 ₦’000 ₦’000

The Company also has unconfirmed letters of credit amounting to ₦13.48 billion (USD 80.26 million)as at year end.

₦ ₦


56


31 DECEMBER 2014

2014 2013 2012 2011GROUP ₦'000 ₦'000 ₦'000 ₦'000Assets/liabilities

Property, plant and equipment 747,793,820 581,465,116 478,091,577 397,711,068 Intangible assets 3,698,535 2,306,170 1,726,734 1,797,127 Investments - 389 - 50 Prepayments for property, plant & equipment 79,490,715 91,715,470 45,015,692 52,395,768 Net current liabilities (95,844,738) (15,463,975) (12,135,067) (49,196,828)Deferred taxation (liabilities)/assets (3,839,736) 19,128,300 8,941,306 (1,196,798)Long term debts (131,941,708) (124,850,394) (112,462,464) (116,766,429)Staff gratuity (2,069,460) (1,962,640) (1,743,676) (1,372,514)Other non-current liabilities (5,401,273) (2,245,166) (2,897,701) (1,557,069)Net Assets 591,886,155 550,093,270 404,536,401 281,814,375

Capital And Reserves

Share capital 8,520,254 8,520,254 8,520,254 7,745,685 Share premium 42,430,000 42,430,000 42,430,000 42,430,000 Capital Contribution 2,876,642 2,876,642 2,876,642 2,876,642 Employee benefit reserve (16,075) (465,792) (746,282) (473,946)Currency translation reserve (3,836,663) (4,752,664) (1,443,862) - Revenue reserve 537,750,794 496,455,952 345,665,182 220,689,333 Non controlling interest 4,161,203 5,028,878 7,234,467 8,546,661

591,886,155 550,093,270 404,536,401 281,814,375

Turnover, Profit and Loss accountTurnover 391,639,060 386,177,220 298,454,068 241,405,977

Profit before taxation 184,688,927 190,761,362 135,647,589 113,779,556 Taxation (25,187,434) 10,436,726 9,376,645 (927,388)

Profit after taxation 159,501,493 201,198,088 145,024,234 112,852,168

Per share data (Naira):Earnings - (Basic) 9.42 11.85 8.52 7.13 Net assets 34.73 32.28 23.74 18.19

Earnings per share are based on profit after taxation and the weighted average number of issued and fully paid ordinary shares at the end of each financial year.

Net assets per share are based on net assets and the weighted average number of issued and fully paid ordinary shares at the end of each financial year.

BALANCE SHEET

Consolidated Four-year Financial Summary Non IFRS Statement

57


31 DECEMBER 2014

IFRS

BALANCE SHEET

Assets/( Liabilities)

Property, plant and equipment 526,721,478 452,046,889 377,864,231 348,844,271 305,655,317

Intangible assets 682,327 672,190 848 8,650 54,437

Investments 26,077,270 25,207,676 25,096,917 27,622,401 50

Receivables from subsidiaries 277,149,739 164,524,881 85,925,971 70,227,221 -

Prepayments for property, plant

& equipment 1,772,564 23,950,013 21,062,209 25,650,934 5,358,404

Net current liabilities (87,946,307) (14,053,826) (18,436,841) (66,613,235) (19,167,946)

Deferred taxation (liabilities)/assets (6,725,009) 18,359,111 8,107,066 (607,765) (8,537,635)

Long term debts (95,435,088) (95,079,111) (83,050,601) (116,766,429) (80,504,837

Staff gratuity (2,069,460) (1,962,640) (1,743,676) (1,372,514) (913,632)

Other non-current liabilities (1,684,400) (2,102,357) (2,685,020) (1,231,999) (319,370)

Net Assets 638,543,114 571,562,826 412,141,104 285,761,535 201,624,788

Capital and reserves

Share capital 8,520,254 8,520,254 8,520,254 7,745,685 7745685

Share premium 42,430,000 42,430,000 42,430,000 42,430,000 42,430,000

Capital contribution 2,828,497 2,828,497 2,828,497 2,828,497 2828497

Employee benefit reserve (16,075) (465,792) (746,282) (473,946)

Retained Earnings 584,780,438 518,249,867 359,108,635 233,231,299 148,620,606

638,543,114 571,562,826 412,141,104 285,761,535 201,624,788

IFRS NGAAP

14 13 12 11 10

₦'000 ₦'000 ₦'000 ₦'000 ₦'000

Turnover, Profit and Loss account

Turnover 371,534,117 371,551,567 285,635,278 241,405,977 202,565,699

Profit before taxation 213,039,663 200,010,823 138,088,716 113,779,556 101,334,468

Taxation (27,225,540) 10,251,931 7,927,403 (3,292,404) (1,342,294)

Profit after taxation 185,814,123 210,262,754 146,016,119 110,487,152 99,992,174

Extraordinary item (1,282,980)

Profit after taxation and extraordinary item 185,814,123 210,262,754 146,016,119 110,487,152 98,709,194

Per share data (Naira):

Earnings - (Basic) 10.90 12.34 8.57 7.13 6.37

Net Assets 37.47 33.54 24.19 18.45 13.02

Earnings per share are based on profit after taxation and the weighted average number of issued and fully paid ordinary

shares at the end of each financial year.

Net assets per share are based on net assets and the weighted average number of issued and fully paid ordinary shares at

the end of each financial year.

31-Dec-14 31-Dec-13 31-Dec-12 31-Dec-11 31-Dec-10

COMPANY ₦'000 ₦'000 ₦'000 ₦'000 ₦'000

31-Dec- 31-Dec- 31-Dec- 31-Dec- 31-Dec-

Separate Five-year Financial Summary Non-IFRS Statement

58


31 DECEMBER 2014

Group Company 2014 2013 2014 2013 ₦'000 % ₦'000 % ₦'000 % ₦'000 % Sales 391,639,060 386,177,220 371,534,117 371,551,567Finance income 30,565,122 8,596,499 42,498,705 10,380,078 Other income 3,608,671 1,724,477 3,541,936 727,519

425,812,853 396,498,196 417,574,758 382,659,164

Bought-in-materials and services:Imported (41,476,008) (44,639,683) (35,615,939) (31,526,054)Local (110,176,787) (98,413,788) (96,744,576) (93,511,195)

Value added 274,160,058 100 253,444,725 100 285,214,243 100 257,621,915 100

Applied as follows:

To pay employees:Salaries, wages and other benefits 20,227,090 7 15,260,315 6 17,605,541 6 13,997,005 5

To pay Government:Current Taxation 2,139,936 1 1,379 - 2,141,420 1 114 -

To pay providers of capital:Finance charges 32,978,194 12 13,717,542 5 20,366,983 7 11,448,932 4

To provide for maintenance of fixed assets:Depreciation 35,984,636 13 33,556,171 13 33,968,300 12 32,028,158 13 Amortization 281,211 - 149,335 - 233,756 - 136,997 - Retained in the groupNon controlling interest (1,076,901) - (714,204) - - - - - Profit and loss account 160,578,394 59 201,912,292 80 185,814,123 65 210,262,754 82

274,160,058 100 253,444,725 100 285,214,243 100 257,621,915 100

Value added represents the additional wealth which the company has been able to create by its own and its employees' efforts. The statement shows the allocation of that wealth to employees, government, providers of finance and shareholders, and that retained for future creation of more wealth.

Deferred taxation 23,047,498 8 (10,438,105) (4) 25,084,120 9 (10,252,045) (4)

Consolidated and Separate Statement of Value Added (Non-IFRS)

dangote cement plc...dangote cement plc consolidated and separate financial statements 31 december...

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